CarDr’s diagnosis shows issues that could be costing the used-car industry more than $7 billion.

The latest diagnostic study from the automotive diagnostic and appraisal technology provider, using data from CarDr’s on-board diagnostic scanner, found more than 5.5% of all vehicles analyzed had undetected transmission-related issues.

The company’s report extrapolated that over the 7.3 million used cars sold annually through NAAA auctions, using an average transmission repair cost of $4,000, to determine a total industry cost of $1.6 billion.

Adding in the associated cost of arbitration/litigation, the total impact on auctions could reach $7.6 billion, the company said.

In a news release, CarDr said its findings are significant for dealerships and auctions.

“Our advanced OBD scanners are essential tools for mitigating risk,” vice president of sales and marketing Robert Gorincen said. “Whether it’s evaluating a consumer trade-in or minimizing post-sale arbitration, these tools provide the insights needed to make sound decisions. By leveraging CarDr’s technology, businesses can safeguard their operations against costly surprises and maintain their bottom line.”

The company said it will continue to expand the coverage of its tools and will regularly publish its findings to help dealerships and used-vehicle auctions improve their operational efficiency.

“CarDr’s technology goes deeper than ever before,” founder and CEO Parry Singh said. “Our advanced OBD scanner identifies transmission codes with greater accuracy than traditional methods and does so at an industry-leading speed of under 15 seconds. That capability ensures dealerships, auctions and consumers alike can make better-informed decisions, reducing risks and optimizing vehicle performance.”