How AI is helping dealers sell more cars and book more repairs

The next time you call to book a service appointment for your car, you might not need to speak with a human.

Companies with artificial intelligence-powered tools are pushing into all corners of the dealership experience, from car buying to the repair shop. AI is now in dealers’ website chatbots, text and voice assistants, sales lead tools, and repair schedulers. It’s helping decide whether customers get financing and helping dealers themselves make financial decisions, such as whether it’s a good time to sell or expand their businesses.

“There are a lot of things that it’s going to do better than we can,” said Jeff Laethem, who heads a Buick and GMC dealership in Detroit. Laethem uses an AI product to help manage customer phone calls and book appointments after hours.

Another tool automatically reaches out to customers who might be interested in a car and knows when to follow up a few weeks later: Are you still interested in that Buick Enclave? A third AI software, the dealer said, cross-references various sales reports and can spot geographic sales trends or fresh customer leads.

AI was a hot topic at the National Automobile Dealers Association convention in New Orleans last month, as dealers chatted about how to incorporate it into more of their businesses. And companies on the expo floor hawked products underpinned by the technology.

Among the most common uses being pitched were for automating phones and chats, and streamlining the car repair booking process. Executives from one Texas-based outfit, Blink AI, said their product can handle a majority of a dealership’s inbound calls, give customers status updates on repairs and book appointments, freeing up staff to deal with more complex tasks.

CEO Dave Perry said the goal is to ensure customers don’t get frustrated when they call or try to make an appointment and then give up. That’s where artificial intelligence plays a role.

“In order to use any sort of automation to manage customer engagements, you’ve got to understand what their intent is, right?” he said. “And sometimes it’s unclear. Humans, just by nature, aren’t so specific as computers are about what they’re trying to do. And so you’ve got to infer, oftentimes, what it is that this person is trying to do.”

Dealers often miss out on one out of every three calls, said Shelli Clark, marketing director of Stella AI, which offers voice and chat assistants. AI can help ensure those prospective customers aren’t lost: “You can put her on the phone tree wherever it makes sense for your dealership,” Clark said of “Stella.”

Companies like AutoEngage.ai are solely focused on the repair side of the business, a key profit driver for dealerships. The northern Virginia firm has an AI-backed texting service that helps customers schedule their vehicles in the shop. It sends reminders, can answer questions, and books an appointment without sending the customer to a different scheduler page.

The AI knows how to steer conversations and monitors how busy the shop is on a given day, said Vishal Vadodaria, whose title is chief AI evangelist.

“It’s like a dentist reaching out to you via texting, except that there’s no person behind it—it’s an AI,” he said. “But the experience is the same.”

Mo Zahabi, associate vice president of product consulting for Cox Automotive Inc., said many car retailers have already implemented these types of generative AI solutions like chatbots, which can create their own content, reach out to customers, or write a salesperson’s email in a nicer tone.

The next phase, Zahabi said, is using the technology to analyze shoppers’ online behavior data to help drive sales. AI can tell businesses when and how to tailor a message to a potential customer after studying their activity on a dealer’s website or surfing a larger marketplace such as Autotrader. It can see how much the customer wants to pay per month, or how much they believe their trade-in is worth.

Essentially, Zahabi said, AI tools can create a targeted sales strategy that can read someone’s “digital body language”—using technology similar to that of Amazon.com Inc.”s product recommendation engine, or Spotify’s music recommendation system.

“Bots are good if they’re done right, communicating with customers, nurturing leads,” Zahabi said. “But (as a retailer) I need to know, and I need to understand, who I need to reach out to, when I need to do it, and what type of dynamics go on behind the scenes.”

Dealers and AI company executives say the increasing use of the technology has, in some cases, meant fewer staff are needed. But overall Zahabi said dealers he’s spoken with aren’t using it to cut jobs, but rather help bring in more customers and sell cars.

“I don’t think it eliminates jobs,” he said. “I think it just makes different work for people in the dealership.”

The future of AI in the dealership might mean more image recognition software—estimating damages from a collision, for example, or determining if a trade-in has been repainted before, which could suggest it has been in a wreck.

AI avatars, or digitally-generated representations of a person, might help answer basic car questions in the future, Zahabi said. And AI also could help automate more of the dealers’ finance and insurance department.

One company already using AI for its auto financing business is Boston-based Lendbuzz, which caters to customers who lack credit history. Its “artificial intelligence risk analysis” technology gleans borrower data that traditional credit scoring ignores. That means the AI searches through an applicant’s bank account and scrutinizes spending habits, income level, and whether they are paying bills regularly, said Ariana Brogan, marketing brand manager for the firm.

“There’s a massive underserved population,” Emir Erden, Lendbuzz dealership success manager, said of those with little credit history, noting the company originated $1.5 billion in loans last year.

Dealers are also starting to lean on AI to help them decide if it’s a good time to sell their business or expand. A new tool from the dealer mergers and acquisitions firm Dave Cantin Group, called Jump IQ, has “inferred millions of data points on all 18,000 dealerships in the continental U.S.” to show how much each dealer is worth and their other key financial metrics, CEO Dave Cantin said.

“We’re utilizing that data to help them understand the value of their business,” he said, “but also, more importantly, how to help them strategically go acquire new stores.”

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