Auto retailers are facing substantial challenges in adopting artificial intelligence (AI) and predictive data technologies, underscoring a critical gap in the industry’s ability to effectively utilize advanced technologies that could enhance operational efficiency and profitability according to a recent study commissioned by Lotlinx.
Lotlinx, a VIN-specific data company for dealership inventory management, surveyed more than 2,500 dealers across the U.S., found that 78 percent of dealerships reported being unsure about how to effectively use predictive data, indicating a significant knowledge gap that hinders their ability to modernize operations.
Furthermore, only five percent of dealers are leveraging AI and predictive data for predictive maintenance in service departments, and an equally low five percent are using these technologies for inventory management and pricing optimization.
Len Short’s Comments
This underutilization highlights a missed opportunity for dealerships to enhance their service offerings and improve financial performance, according to Len Short, executive chairman of Lotlinx.
“The survey results reveal a stark reality, as many dealers are struggling to leverage predictive analytics effectively,” said Short.
“With such a high percentage of dealerships unsure about utilizing predictive data, there is a clear need for education and partnership with experienced providers like Lotlinx to help bridge this gap as we progress through 2025.”
Where AI is Being Used
Despite the potential benefits of AI and predictive analytics, many dealerships remain entrenched in outdated practices. The survey revealed that while 21.4 percent of dealerships use AI for customer relationship management (CRM) and lead scoring, the majority are not capitalizing on these tools to improve customer engagement or operational efficiency.
The survey identified significant barriers to adoption—integration with existing systems (19 percent), staff training and adoption (18 percent), and data quality or accuracy issues (21 percent) were cited as the primary challenges preventing dealerships from fully embracing predictive analytics.
While 80 percent of dealers indicating plans to invest in AI in 2025, the current state of adoption remains alarmingly low. Many dealers still rely on traditional methods for decision-making, with a significant portion making choices based on historical trends or gut instinct rather than data-driven insights, observed Short.