Artificial intelligence is changing the way consumers shop for cars, and dealers who take advantage of AI can use it to make those consumers more satisfied.
But that just scratches the surface of the impact AI can have on a dealership’s operations, industry experts told WardsAuto. From the showroom and service departments to used car operations, AI can give dealers new tools to sell and source more vehicles as well as keep customers coming back for service.
“I think AI is one of those fundamental technologies that is going to change the way we are going to consume cars, buy and own and sell,” Arun Kumar, a partner and managing director in the automotive and industrial practice at consultancy AlixPartners told WardsAuto in a Zoom call.
Dealers’ first AI investment should be on the front end of dealership operations, to enhance sales, Kumar said.
When a customer arrives at a dealership, AI can help a dealership maximize the chance of converting that visit to a sale by making sure the salesperson has accurate data reflecting what the consumer has already learned online, he said.
That not only helps drive more throughput, it reduces the number of people needed to make the sale happen so the dealership sells more cars with fewer people. “I think that, to me, is pretty number one,” Kumar said.
AI can also make a dealership’s salespeople more effective communicators.
Brendan Harrington, president of dealership group Autobahn Fort Worth, told WardsAuto on a Zoom call that he is working with a developer on a prototype AI agent that provides prompts for salespeople.
As a customer asks questions, the “AI angel” shows the salesperson answers to straightforward questions such as, “Is that blue Toyota Camry still available?” as well as potentially unexpected questions like, “How big is the trunk?”
“So, you sound really intelligent,” Harrington said.
Communication is the most common AI usage at dealerships, Erin Lomax, Cox Automotive vice president, operations, consumer marketplace & AutoTrader, told WardsAuto on a Zoom call.
“I think it's one of the easiest and most common entry points to understand, like, ‘OK, how can I automate these communications that were once manual?’” she said.
Cox Automotive’s Auto AI Readiness in Auto Retail Study, conducted in three phases between April and August of 2025, found that 52% of the 537 franchised dealers who participated were using AI to engage with customers 24/7 using real time text, chat or email.
Another 48% were using it to create personalized email and text while 39% used AI to predict which consumers are ready to buy and target them with personalized messages.
AI is a “key enabler to removing friction out of employee, dealer and consumer processes,” Lomax said.
The case for AI in the service department
Given the number of customers in a Dealer Management System, and a dealership’s weekly volume of service appointments, “it’s pretty difficult to overstate the ROI of AI in fixed operations and service,” Devin Daly, co-founder and CEO of AI service platform Impel, told WardsAuto on a Zoom call.
Impel mines the DMS to find customers who are due for service and contacts them with personalized offers, he said. It schedules appointments, sends follow-up messages, and answers all voice mails.
“It provides a significantly better customer experience,” Daly said.
Numa, another AI-enabled software, uses AI to centralize service department communication with customers, picking up missed calls, routing calls to the correct service advisor and making appointments
Stocking the right used inventory
AI is also infiltrating the dealerships’ pre-owned operations, helping them decide what used vehicles to acquire.
CDK’s Vehicle Inventory Suite includes AI that uses CDK’s “vast amount of data” to help dealers make better purchasing decisions, Dan Doolin, lead product marketer at CDK Global, told WardsAuto on a Zoom call.
If a dealer is considering acquiring a used vehicle on trade-in or at auction, AI can see if the model sold well at other dealerships and show what the retail and wholesale pricing has been for the past six months as well as where it is predicted to go for the next 90 days, Doolin said.
“It can help a dealer determine a unique vision of what is going to happen with the pricing related to the vehicle,” he said.
It’s all about the data
While 74% of dealers in the Cox Automotive AI Readiness study thought AI “has the potential to generate more benefits than risks for my dealership,” 25% are still taking a “wait and see” approach to AI adoption.
The dealers want to trust they are getting compliant solutions that adhere to privacy and anti-discrimination laws, Lomax said. Crucial to that is what data the AI is using, she said.
“There’s a ton of companies out there pitching these great solutions,” Lomax said, “but where is the data coming from?”
The use case can also be different depending on the dealer size and segment, she said.
“But the underpinning of all of that, you know, what you continue to hear and read about, is that the data quality is what matters the most, right? And making sure of that because AI is only as good as the data that fuels it,” Lomax said.
