TL;DR While many dealers still view artificial intelligence as hype, more than 45% of U.S. dealerships are already using it. The data is clear: AI is no longer a futuristic concept but a practical tool driving measurable results. Dealerships leveraging AI are seeing an increase in lead-to-sale conversions, a higher success rate in handling service calls, and revenue boosts across the board. This article provides a practical guide to how AI is being used across dealerships today, from the service lane to the showroom, and what you need to know to avoid falling behind.
For decades, the sound of a ringing phone was the sound of opportunity. Today, it’s often the sound of a problem. Dealerships are facing a communication crisis, and it’s costing them customers and revenue. According to our large-scale analysis of 1.5 million Google reviews, communication failures are the single biggest driver of negative customer feedback, appearing in 36.8% of all negative mentions. The consequences are severe: 82% of customers admit to cutting ties with a dealership due to poor communication.
The root of the issue isn’t a lack of effort from staff; it’s a broken operational model. Service advisors are stretched thin, juggling in-person customers, phone calls, and administrative tasks. Voicemails pile up, callbacks are missed, and customers are left waiting. As one service manager described the situation before implementing AI, “You look at every advisor’s phone and they all are full inboxes with 40 voicemails. Every single one of them”.
Many dealerships attempt to solve this by hiring more BDC representatives or adding more phone lines. However, these solutions often fail to address the core issue: a fragmented and inefficient communication workflow. The most impactful problem dealerships face is not a lack of people to answer phones, but the challenge of managing the customer experience after an appointment is set. This is where AI is making its most significant impact.
Artificial intelligence has moved beyond chatbots and into the core operations of the modern dealership. Here are six key areas where AI is delivering tangible results today.
AI-powered phone systems are now the first line of defense for many service departments, handling routine inquiries and scheduling appointments with remarkable efficiency. AI can operate 24/7, ensuring that after-hours calls and overflow during peak times are always captured. This “digital receptionist” frees up service advisors to focus on customers in the lane and complex, revenue-generating tasks.
Beyond simply answering calls, AI is centralizing dealership communications into a single, unified hub. Platforms like Numa bring together SMS, voice, and internal messaging into one inbox, creating a searchable, accountable record of every customer interaction. This allows service advisors to manage multiple conversations simultaneously without being tethered to a phone.
This approach transforms a chaotic stream of messages into an organized “to-do list.” As Jake Ritter, Service Manager at Five Star Subaru, explains, “This needs to go from just this mess of stuff to now it’s a to-do list... now we have anywhere, usually if we get to 25 that are open right now... that means to myself and the team, there’s 25 things need to be done”. This level of organization and visibility is critical for ensuring no customer falls through the cracks.
Negative reviews are often a lagging indicator of a problem that started hours or even days earlier. AI sentiment analysis is now being used to identify upset customers in real-time, allowing managers to intervene before a negative review is posted. Given that 50% of negative reviews stem from slow callbacks (with an average response time of 23 hours), speed is critical.
AI systems can detect negative sentiment in phone calls or text messages and automatically escalate the conversation to a manager. This proactive “heat-case” management provides an opportunity to recover the customer relationship and prevent the public damage of a one-star review. It’s a fundamental shift from reactive reputation management to proactive customer experience protection.
While still an emerging area, with approximately 5% of U.S. dealerships having implemented specialized AI tools, the impact on inventory management is profound. AI-powered systems analyze market data, sales history, and local demand to provide predictive stocking recommendations. This helps dealers acquire the right vehicles at the right price, reducing the risk of aging inventory.
Furthermore, dynamic pricing algorithms can adjust vehicle prices in near real-time based on market fluctuations. This data-driven approach is helping early adopters reduce aging inventory by up to 40%, freeing up significant capital and improving inventory turn.
AI is also transforming how dealerships market their vehicles and engage with potential buyers. Dealerships using AI-powered advertising tools are seeing reductions in customer acquisition costs by automatically reallocating spend to the best-performing campaigns.
In lead management, AI is delivering even more impressive results. AI-powered CRMs can score leads, initiate follow-up, and nurture prospects, allowing the sales team to focus on a smaller, more qualified set of high-intent buyers.
In the service drive, AI is not just improving efficiency; it’s driving revenue. Predictive maintenance alerts, which analyze vehicle data to anticipate service needs. By proactively reaching out to customers before a component fails, dealers can capture service opportunities that might otherwise go to independent repair shops.
Combined with automated service reminders and AI-powered scheduling, these tools create a seamless and profitable fixed ops ecosystem. The back end of the dealership is quickly becoming a high-tech growth engine, powered by intelligent automation.
Take Five Star Subaru for example. The implementation of Numa’s AI-powered communication platform contributed to a nearly four-point jump in their Net Promoter Score (NPS) and helped them earn the prestigious Subaru Retailer of the Year award. “Our NPS scores are higher than they’ve ever been and they’re going up,” says Service Manager Jake Ritter. “And you can’t tell me that part of that’s not due to Numa and the communication ability that it offers”.
Despite the successes, AI implementation is not without its challenges. Dealers should be aware of these common pitfalls:
For dealers looking to begin their AI journey, the key is to start with a high-pain, high-impact area. Here are five practical starting points:
Many dealers fall into the trap of believing that their communication problems can be solved by simply hiring another BDC representative or booking more appointments. The reality is that the most critical breakdown in the customer experience happens after the initial contact. The real challenge is managing the complex web of communication that follows: status updates, approvals, and follow-ups.
At Numa, we believe that AI’s primary role is to empower your existing team. Our platform is designed as a comprehensive communication hub that provides visibility and accountability across your entire operation. We focus on solving the root cause of the communication crisis, not just the symptoms.
This philosophy is built on a unique foundation that combines over 250 years of collective GM dealership experience with a team of more than 50 machine learning PhDs. We understand the nuances of the service lane and the pressures of CSI scores, and we’ve built an AI that speaks the language of your dealership.
While many AI vendors focus on flashy demos, we focus on delivering a system that is proven at scale, with over 300 million calls handled and 100 million appointments booked across more than 1,000 dealerships. We believe that by fixing the communication workflow, you don’t just improve efficiency. You build lasting customer relationships and drive sustainable growth.
Q: What if the AI makes a mistake and we get sued?
A: This is a valid concern, and it highlights the importance of choosing the right partner. At Numa, your privacy and data security are top of mind. Our technology ensures the full understanding of contexts for each RO and transactions, providing the most accurate responses to your customers. You should always ask potential vendors about their liability policies.
Q: Can AI integrate with our existing DMS and CRM?
A: Yes, modern AI platforms are designed to integrate with major dealership management systems (such as CDK, Reynolds and Reynolds, and Dealertrack) and customer relationship management software. Always confirm specific integrations with any vendor you are considering.
Q: What happens when AI can’t handle a customer’s request?
A: The AI should have a clear protocol for escalating the conversation to a human. It is critical to evaluate a vendor’s handoff process to ensure it is seamless and reliable.
Q: How do I know if my dealership is ready for AI?
A: If you are experiencing common communication pain points—such as missed calls, a backlog of voicemails, slow response times, or negative reviews related to communication—then you are ready to explore AI. The key is to start with a specific, high-pain area and expand from there.
No more hold music. No more unanswered voicemails. Your customers are top priority.
