Written By: Alysha Webb
AI Adoption: High Interest, Low Integration
It’s not an exaggeration to say that AI is everywhere these days and the auto world is no different. Many dealers feel that investing in AI is critical for long-term business success, but not many have actually integrated AI into their dealership’s workflow or decision making.
Our recent webinar, “Hype vs. Reality: Agentic AI in Today’s Dealership,” combined a look at what’s possible with actual dealership experience and what is currently working. Panelists Jade Terreberry, senior director of strategic planning at Cox Automotive, and Lonny Soza, vice president of Fertitta Automotive Group and president of the group’s Post Oak Motors platform, discussed the possibilities AI presents, the benefits one dealership group has already achieved, and some of AI’s shortcomings.
“The biggest theme we want you to take away from today related to AI is that you just have to start,” Terreberry said.
Cox Automotive research found that 63% of dealers believe investing in AI now is critical for long-term business success, and dealership investment in AI is accelerating. But there is still significant confusion surrounding AI buzzwords and the actual impact AI can have on a dealership’s bottom line. Perhaps because of that confusion, only 15% of dealers have AI integrated into their information workflow or decision-making, according to Cox Automotive research.
What Is Agentic AI?
"Engaging with agentic AI is crucial in dealerships today because of the efficiency boost it enables. Using it, a four-car-a-month salesperson can become an eight-car-a-month salesperson, and so on."
A term appearing more and more frequently in AI conversations is “agentic” AI. What is agentic AI? It ingests massive amounts of data and information and, using that, autonomously executes complex tasks without step-by-step instructions. It can plan and execute tasks across a dealership’s systems. Basic, or generative, AI, in comparison, is reactive and responds to prompts.
What 70% of dealers are using today is “primarily predictive and analytical AI to help with tasks such as scoring a VIN-level likelihood to sell, signaling scarcity, and mapping supply and demand across competitive sets and consumer shopping radii,” Terreberry said.
So, for example, basic AI would flag a unit as slow-moving, while agentic AI would autonomously reprice that unit. Basic AI can map consumer shopping radii, while agentic AI would dynamically route leads or ad spend.
Engaging with agentic AI is crucial in dealerships today because of the efficiency boost it enables, Terreberry said. Using it, she said, a four-car-a-month salesperson can become an eight-car-a-month salesperson, and so on. Agentic AI “is assistive in things (the people) can do,” she said, “really giving your teams and your people the opportunity to shine in the areas that only humans can do.”
The areas where Cox Automotive is seeing agentic AI making an impact in dealerships today are:
- 24/7 lead engagement
- Service scheduling and follow-up
- Used vehicle remarketing and pricing
Fertitta Automotive Group has found agentic AI to be “an absolute game changer in certain aspects of the business,” Soza said. For example, it is using agentic AI in the service department at its Chevrolet store to mine the dealership’s existing customer base, identify customers the dealership has not seen in a while, and reach out to them, Soza said. The impact has been dramatic.
“We are grossing about $200,000 a month additional service gross just after implementing,” he said. While the group has made some other process changes, capturing the forgotten customer base “has been largely responsible for the uplift.”
AI Is Not the Right Approach for All Franchises
But using AI is not one-size-fits-all, Soza has found. Fertitta Automotive Group, based in Houston, Texas, includes one Chevrolet store. Its other dealerships are mainly ultra-luxury franchises, including Bugatti, Bentley, and Rolls-Royce.
While using AI to reach out to customers works well with its volume brand, the same is not true for its ultra-luxury stores, Soza said. “We cannot use AI to follow up with them,” he said. “I’m talking specifically our Rolls-Royce and our Bentley brands.”
If customers miss a call in the evening at those stores, the group must engage with them directly, either with a phone call in the morning or in person, he said.
That points to the complexity of the dealership business, Terreberry said. “No two consumer journeys are hardly ever the same.” The complexity grows in high-volume, time-sensitive volume-brand dealerships such as a Chevrolet store, she said.
Three Core Use Cases for Dealership AI
"AI has given the consumer more information but it has also given the dealer the ability to serve the right customer with the right re-engagement message via the right channel at the right time with the right call to action that drops them back in the right place.”
Using AI to quickly deliver relevant content to customers based on all of their interactions with a dealership is crucial, she said. “It’s about protecting what you have, the market share that you have today,” Terreberry said. “Keeping (that market share) and keeping your known customers attached to you is just as important as getting out there and driving new ones.”
Terreberry divided dealerships’ use of AI into three primary categories:
- Customer engagement
- Inventory and pricing
- Personalized marketing
For customer engagement, AI can access all of a dealership’s points of customer contact, including, for example, what BDC person they may have talked to a week ago or the valuation they had on their trade-in. Leveraging that data helps a dealership build trust with a customer, Terreberry said.
Dealers are also using AI to assess the VIN-level likelihood a model will sell at a certified price and better understand scarcity and the supply and demand equation, she said, “not only in your own market but within maybe the competitive set in the distance in which consumers are willing to shop.”
For marketing, AI assists in audience creation and activation, but also in making sure the content is relevant to each individual customer. AI has given the consumer more information, Terreberry said, but it has also given the dealer “the ability to serve the right customer with the right re-engagement message via the right channel at the right time with the right call to action that drops them back in the right place.”
How to place this AI superpower in a store’s ecosystem given that many dealerships use different vendors for their CRM and their DMS, plus other functions? Soza asked. It takes the right partner, Terreberry said, with the tools and a layer of connectivity built in so they can all interact.
“I would say vendor selection, the data underlying it, and the ability to connect in real time are how you and your team should be thinking about selecting what tools you use in this space,” she said.
Adoption in Bite-Sized Chunks
So, you’re using AI tools across your dealership’s operations, and they’re all talking to each other for maximum impact. But if your employees won’t use those tools, or use them correctly, that uplift is lost. Leadership needs to ensure that their team understands why using AI will impact the dealership’s bottom line and their paycheck, Terreberry said. Pay plans drive behavior, she said.
But rather than try to change everything at once, “adoption of AI, it works the best in really small, tiny, bite-sized chunks. How do we eat our elephant one bite at a time?,” Terreberry asked.
That’s where Soza’s example comes in. He has a successful strategy for AI adoption at his dealerships, and according to Cox Automotive, dealerships with a strategic AI plan are 1.2x more likely to rate their performance as strong and 1.4x more likely to rate efficiency as strong.
The areas Fertitta Automotive Group is seeing the biggest operational wins with AI are:
- Faster response and fewer missed opportunities
- More consistency in pricing and appraisals
- Better use of data dealers already have
- Less manual work in high-volume workflows
Responding to an inquiry within five minutes makes a dealership up to 21 times more likely to qualify a buyer, Soza said. “And conversational AI captures that a lot quicker and qualifies those leads a lot better than traditional methods,” he said.
AI chatbots handle 60% of customer inquiries, providing instant responses 24/7, Soza said, and Fertitta uses chatbots during the day to catch call overflow for both receptionists and service advisors. After hours, AI captures customers looking to schedule service or who have questions about a car.
It also, as previously discussed, scrubs the dealership database for lost customers. That includes customers who have an open recall and declined services and OEM-recommended maintenance, and even someone who is almost at the end of their free oil changes, Terreberry said. AI can do these things at scale, “and you know, it’s an entirely new profit center because time is money and money is money,” she said.
It takes time for employees to realize that AI can increase their paychecks, however. So, approach AI adoption as a progression, not a leap, Soza advised. For example, start with assistive AI, which makes recommendations and predictions. Move to AI handling semi-automated tasks such as follow-up and price support, then into limited autonomous workflows with human oversight.
With this kind of gradual adoption, employees will be more receptive to the improvements AI can produce. And at Fertitta Automotive Group they have been remarkable, Soza said. “I honestly don’t think we were prepared to see the lift that we saw,” he said.
His group has started using AI in its BDC and in e-commerce and has seen its internet closing ratio rise from single to double digits. “We’re talking 5 and 6% to beyond 11% today, and we’re only a couple of months into this,” Soza said.
Fertitta Automotive Group also just started using AI for photo reimaging in the used vehicle business. The AI regenerating system it has developed doesn’t misrepresent the vehicle, he said. Rather, it “removes a lot of the noise” around the vehicle. “We can take a picture of a car that was just traded today with dirt, with stickers, and even trash on the floorboard. AI will remove all of those, you know, those elements and make it look like it just came out of detail,” he said.
Although any scratches or dents will still be there, it does speed time to market, Soza said. “With the power of AI, you can really change the game there,” he said.
Managing AI for Long-Term Success
"When you’re beginning to use AI, start with something that’s controllable, that’s not going to break your world if it’s handled wrong, but it can give you a big lift if it’s handled correctly.”
Don’t just install AI and let it run, however, Soza cautioned. He recommends constantly monitoring and managing AI tools, and giving feedback to vendors. Depending on the automotive brand, “there are going to be different levels of engagement that the customer wants to be at,” Soza said.
While all this may be exciting, don’t try to bite off too big a chunk of AI at the start, Soza cautioned. When you’re beginning to use AI, “start with something that’s controllable,” he said, “that’s not going to break your world if it’s handled wrong, but it can give you a big lift if it’s handled correctly.”
As dealerships continue navigating rapid AI adoption, the key takeaway from both panelists is that success depends less on the technology itself and more on how it is implemented. From data connectivity and vendor selection to employee adoption and workflow design, AI delivers the most value when it is introduced intentionally and scaled gradually. For dealers willing to start small, align teams, and build systems that evolve over time, agentic AI is already proving to be less of a future concept and more of a present-day competitive advantage.
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