Copart, an international giant in the auto parts market and vehicle auctions, is experiencing remarkable prosperity. The company is reporting an increase in revenue, gross margin, and net income for the quarter and the year. During a recent earnings presentation, analysts and Copart’s CEO, Jeff Liaw, detailed how the company is using artificial intelligence to transform its business.
AI to Assess and Value Damaged Vehicles
For an operation like Copart’s, which handles a colossal volume of often similar transactions, the deployment of AI is particularly relevant. Instead of using physical inspection tools, Copart leverages AI for tasks such as vehicle price evaluation and the decision to scrap vehicles (“totaled”), all based on the analysis of massive data.
In practice, this means calculating the cost of estimated repairs relative to the vehicle’s value much faster than before. This speed of analysis is already influencing insurance premiums and the value of used cars globally, even affecting the international distribution of vehicles.
The Growing Complexity of Modern Vehicles
An intriguing phenomenon is at play: although the severity of accidents is declining, the rate of vehicles declared economically irreparable (“total loss frequency”) is rising. Copart’s teams attribute this to the increasing complexity of modern cars, making them more expensive to repair. A striking example: a 2024 F-150 taillight costs over $1000.
CEO Jeff Liaw specified: “The frequency of total losses has generally increased at a rate far exceeding the decline in the frequency of accidents themselves. In the United States, it stood at 22.2% in the second quarter of 2025, compared to 21.5% a year earlier.”
A Dynamic International Market
Irreparable vehicles are mostly exported. Cheaper labor abroad and the possibility of obtaining a new title for them make their restoration financially viable. Liaw notes that international buyers account for about 40% of the vehicles sold at auction in the United States by Copart, generating nearly half of the proceeds.
AI, the Ultimate Arbiter of Vehicle Value
Car auctions like Copart maintain a unique relationship with sales data and repair viability. They react to these values and simultaneously define them, creating a self-reinforcing loop.
AI only accelerates and amplifies this process. By evaluating vehicles with an unparalleled amount of data, it becomes the ultimate arbiter of their value, dictating what should be repaired or scrapped, and ultimately, the cost of insuring certain models.
The CEO’s Remarks on Copart’s AI Strategy
When questioned by analysts, Jeff Liaw detailed the use of AI: “We equip our sellers with tools to make instant total loss decisions, informed by millions of similar vehicles sold in the past. These decision-support tools are greatly powered by large language model (LLM) technologies.”
AI is also deployed in customer support, agent support, and even at the auction level to recommend products to buyers. Liaw concluded by stating that this technology makes Copart radically more efficient and paves the way for future opportunities, even announcing that a dedicated presentation on their use of AI might take place.