AI is often met with enthusiasm at automotive industry seminars and dealership conferences, where new tools and features are presented with excitement and optimism. However, beyond the conference halls, applying AI in real dealership settings remains a challenge for many.
According to a Lotlinx survey 2024, 78 percent of auto dealers are unsure about using predictive data, only 5 percent utilize it for pricing or inventory, and 41 percent don’t use it at all, despite believing it could significantly benefit their operations. These numbers highlight the need for practical guidance, not just inspiration.
This article examines the most common challenges and provides actionable strategies to address them.
When AI Misleads: Inaccurate Financing Quotes
One of the key challenges in the digital car-buying journey is the frequent inaccuracy of AI-generated payment estimates on dealership websites. These tools aim to predict lender approvals without access to real-time underwriting data, as lenders are no longer providing transparent rate sheets. According to eLEND Solutions, over 75 percent of online payment quotes are inaccurate, usually showing lower amounts than customers will ultimately pay. The same study reveals that 86 percent of dealers and lenders agree these inaccuracies negatively impact the customer experience.
Solution:
Rather than relying on AI tools to predict financing terms, dealerships can enhance the buyer experience by utilizing technology that provides pricing transparency rather than financial predictions. Tools that compare a vehicle’s price to similar listings in the local market provide customers with real-time context, making the pricing feel fair, competitive, and grounded in reality.
The Cybersecurity and Identity Fraud Risk in AI Adoption
As dealerships adopt AI-powered tools, they naturally collect and store large amounts of sensitive customer data, such as driver’s license scans, financing details, and personal contact information. This makes them increasingly attractive targets for cyberattacks. Additionally, identity fraud is especially problematic in fully digital transactions, where fraudsters can bypass automated verification systems with stolen or fake credentials.
Solution:
To protect their operations and customers, dealerships must integrate robust cybersecurity measures alongside their AI systems. This includes implementing data encryption, multi-factor authentication, and secure access controls across all digital touchpoints. Identity verification should also be strengthened with tools beyond basic form entries, such as driver’s license scanning combined with real-time selfie matching. Just as necessary, dealerships should communicate their security practices on their websites and digital platforms to reassure customers that their data is being handled with care and professionalism.
When More AI Means More Problems
These days, it seems like there’s an AI tool for almost everything, and each tool has multiple vendors. While that might sound helpful, it’s becoming a serious problem for dealerships. Juggling multiple dashboards, overlapping features, and scattered data can be exhausting. Instead of streamlining work, the clutter slows teams down and leaves valuable tools unused.
Beyond that, the risks and costs continue to accumulate. Each tool adds another layer of expense—from licensing fees to training hours—and often duplicates features already available elsewhere. More tools also mean more vendors handling sensitive data, creating potential security gaps and increasing compliance challenges. On top of that, disconnected platforms result in data silos, providing teams with incomplete or conflicting views of performance.
Solution:
To address this, dealerships should prioritize platforms that offer multiple AI capabilities within a single, integrated system. Additionally, assigning dedicated personnel to manage AI tools and data operations can reduce the burden on frontline staff. It ensures that insights are not only collected but also used to drive results. Just as important is setting clear objectives for each tool and creating a unified strategy. Every AI solution should be aligned with specific business goals, like improving lead response times, enhancing customer engagement, or streamlining inventory management.
Choose the Right AI Tool For You
The road to AI adoption isn’t without obstacles for dealerships, including inaccurate payment estimates, rising cybersecurity concerns, and an overload of disconnected tools. The key is not using more tools, but using the right ones—strategically, securely, and aligned with dealership goals. With the right approach, AI can move from being a burden to a true advantage.
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