January 21, 2026 – After years of talk about artificial intelligence (AI) transforming automotive retail, US car dealers are now focusing on a simpler question: where does AI actually pay for itself?
Facing tighter margins, rising lead costs and ongoing pressure on marketing teams, dealers are increasingly deploying AI in narrow, well-defined parts of the retail operation rather than betting on end-to-end automation. The goal is not experimentation, but measurable returns.
This is already visible in how dealers approach digital marketing, inventory presentation and content production, areas where speed, scale and consistency matter more than broad transformation.
Data from a nationwide survey of 500 US car dealers suggests the move toward ‘practical AI’ is now mainstream. A majority of respondents expect AI to improve operational efficiency (57%) and lower costs (54%), with video production ranked among the top three areas where dealers believe AI can deliver value today.
“This is work that simply wasn’t previously possible for us to do”
Video has become a priority across dealer marketing as platforms increasingly favour dynamic formats over static imagery. But producing video at inventory scale remains a bottleneck, particularly for larger dealer groups managing thousands of vehicles with limited creative resources.
One group already seeing results is Ken Garff, which operates nearly 70 dealerships across nine states. As paid social grew into a core acquisition channel, the group began to see pressure on cost per lead from standard automotive inventory ads.
To test whether automated video could improve performance, Ken Garff piloted AI-generated creative across eight dealerships, using automated video company Phyron to produce video at inventory scale for Meta Automotive Inventory Ads.
“We use the Meta Ads all the time. If a store has a low budget, that’s the single campaign we recommend they start with,” says Jordyn Canady, Social Media Manager at Ken Garff. “But when lead costs rise, that’s not a good use of our advertising dollars. We watch those numbers like hawks.”
The results were immediate. Across the pilot stores, Phyron video ads delivered a 32.2% increase in click-through rate and an average 4.7% reduction in cost per lead—even as lead costs increased across the wider market. Several top-performing stores saw CPL reductions of up to 22.9%, highlighting the significant performance gains achievable at the dealership level. The approach also removed a manual workload that would have required hundreds of hours to maintain at scale. “We could never have produced this volume of content manually,” Jordyn said. “This is work that simply wasn’t previously possible for us to do.”
AI Delivering Measurable Gains, Not Headlines
The Ken Garff pilot reflects a broader pattern emerging across US retail. Dealers are not waiting for AI to sell cars autonomously. Instead, they are applying it where it replaces work that is slow, repetitive or difficult to scale manually.
Phyron’s dealer survey shows video production sits alongside aftersales processes and financing workflows as one of the clearest near-term use cases for AI. These are areas where automation can improve speed and consistency without disrupting customer-facing decision making.
“Dealers are becoming much more selective,” says Mattias Kellquist, CEO and co-founder at Phyron. “They’re not asking what AI might do in five years. They’re asking where it already saves time or money today, without adding complexity.”
Ahead of NADA
Before the industry gathers in Las Vegas for the upcoming NADA Show (3-6 Feb), these kinds of examples are likely to feature heavily in conversations on the show floor. Rather than broad promises about transformation, dealers are comparing notes on which AI deployments deliver tangible gains and which do not.
And car retailers are moving stock at a more rapid rate thanks to Phyron, 100% powered by AI and automation. All of this with no input or effort needed by dealer staff, with the AI platform essentially becoming an essential tool to support busy internal marketing teams.
Phyron works with over 4,000 dealer customers across 35 countries. Since January 2021, these customers’ automated videos have generated more than 500 million views. The team will be located at booth #2373W during NADA.
About Phyron
Since 2019, Swedish video tech pioneer Phyron has been continually developing the world’s first fully automated AI-enhanced video solution. Using Artificial Intelligence (AI), the software identifies the best and most relevant selling points of each individual car and combines still images from a data feed, facts and figures about the car, brand imagery and retailer services into relevant, highly effective videos.