Welcome to another edition of the Car Dealership Guy Podcast Recap—a rundown of key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Eric Rea, CEO of Podium.
Eric breaks down how AI agents are replacing labor across sales and service and why speed is now the ultimate competitive advantage.
Dealers should plan for an army of AI experts running their operations.
Engineers at software companies (like Podium) now produce 10 times more output than two years ago by orchestrating AI agents instead of writing code themselves.
"Just like agents are helping our engineers write code, you should plan on an army of experts that are helping you run your dealership in the future. Not just like a BDC agent, not just a service adviser agent. You should plan on having an army of experts."
The question is, as AI reshapes dealership operations, whether or not dealerships will plan for it or get caught unprepared.
The constraint at dealerships is people, not technology.
Dealerships running on 3.5% net margins don't have enough people to make their existing software valuable, no matter how many tools they add.
"The real thing people want, they don't want another freaking software to log into. They want to augment labor to grow their business and run the operations of their dealer. That's it. We need to stop thinking that we're so cool because we're a software company and we need to start focusing on labor replacement."
If a vendor is pitching you features instead of labor replacement, they're solving yesterday's problem.
AI agents need to complete jobs from start to finish.
Many AI products only get 10% of the way through a task like scheduling a test drive, making them glorified answering services that still require human follow-up.
"You should expect if you buy AI or buy labor replacement, whatever you want to call it, you should expect that it does the job of a person and if it doesn't, you're wasting your money because you still have to have a person on the other side."
The bar for AI products should be simple: does it eliminate the need for a person to finish the job, or does it just create more work?
"Set it and forget it" AI doesn't exist for dealerships.
Replacing human labor requires thousands of customizations for each dealership's specific processes and preferences.
"If somebody's telling you it's set and forget it, I would run. Don't walk, run away from that vendor."
Ask vendors how much time they'll spend on-site customizing for your dealership—if they hesitate, that's your answer.
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AI agents need real-time system access to function properly.
Building AI that can do human work requires live API connections to every DMS, CRM, and service platform, which is technically complex.
"You want these AI agents or these AI employees to act like a human and do human work, you’ve got to give them access to all the systems and the information like a human. And it's been a massive challenge."
The vendors investing heavily in integration infrastructure now will pull ahead as AI demands more sophisticated data access.
Speed creates lasting competitive advantages in AI adoption.
Moving early with AI agents revealed that real customization requires deeper flexibility than simple toggles and settings.
"What I have found is being fast is the number one competitive advantage. It always has been. And now that is the case even more than any time in history because of AI."
The dealers learning how to customize and deploy AI agents today will have a two-year head start on their competition.
Service advisers face the most demanding role in dealerships.
Service advisers juggle customers in front of them while fielding constant calls for updates, which causes issues to slip through the cracks.
"The service advisor is the most difficult job in the dealer. I don't care what anybody else says. It's horrible."
If your service department is the bottleneck, AI assistants that handle status calls and escalations could be the highest-ROI investment you make.
Service departments can't capture available revenue due to staffing limits.
Recalls, telematics, and warranty work represent opportunities that go unrealized because service teams don't have time for proactive outreach.
"The amount of revenue potential sitting in a service department is massive and they don't do it because there aren't enough people."
The service departments that deploy AI for proactive outreach will unlock revenue that's been sitting in their DMS all along.
Building communication tools positioned some companies perfectly for AI.
Sitting on top of CRMs and DMS systems without being a CRM itself avoided the technical debt that now slows down legacy platforms.
"We're lucky that we kept a layer of software that sat on top of all the big CRM, DMSs for a long time because now we don't have an innovator's dilemma. We don't have to destroy all the technical debt."
Watch for vendors who built flexible infrastructure without legacy constraints—they'll innovate faster than those trying to retrofit old systems.
High-skill workers are already using AI to multiply their output.
If AI can make the hardest-to-find talent 10x more productive, imagine what it can do for the leads and service revenue you're already leaving on the table.
"If you're a dealer principal or GSM, like this stuff's coming. Software engineering, the reason why they make so much money is because it's probably one of the most sought-after difficult to attain skills out there."
The gap between dealers who deploy AI labor and those who don't will be measured in millions, not percentages.
