A new report by Cox Automotive reveals that most dealers are either cautiously observing or just beginning to experiment with AI. And those adopting the tech are already seeing significant benefits.
The details: The 2025 Cox Automotive AI Readiness in Auto Retail Study found that among 516 dealership leaders surveyed, most retailers are still early in their AI journey.
25% of dealers indicated they are taking a “wait and see” approach to AI.
60% said they are “starting to explore” or “testing the waters” with the technology.
Only 15% of dealerships have “integrated” or “embedded” AI into their workflows.
What they’re saying: “You hear about AI non-stop, but until I see it truly impacting the bottom line, it’s just noise,” said a Southeast BDC Manager of a single-point franchise, per Cox Automotive.
Why it matters: Despite the industry buzz, most dealers remain cautious—overwhelmed by the hype surrounding AI and wary of investing too soon. Cox describes this as a “learning” phase, where curiosity is high but practical adoption is still developing.
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Between the lines: Dealers that have strategically adopted and optimized AI in their workflows are already seeing clear returns.
They are 50% more likely to report revenue growth, efficiency gains, and higher profitability than those still experimenting.
Dealers with an AI plan are 1.2 times more likely to rate their current performance as strong (and 1.4 times more likely to rate their efficiency as strong) compared to those without a plan.
Also worth noting: Among the top-performing “AI-optimized” dealers (early adopters), 48% said they are ready to put new processes in place, 44% have a strategic plan, and 81% reported that implementation was easier than expected—compared to just 10% of other dealers in the study.
What they’re saying: “The writing is on the wall,” said a Midwest BDC director of a franchise dealer group. “You better get on the stick, or you’re going to get blown away. You can see how much an employee costs. The cost of AI, in comparison, is not that much, especially if the AI is a rock star.”
Bottom line: The biggest risk for dealers isn’t in trying AI—it’s in waiting too long. Those moving beyond experimentation and building a clear, strategic plan are setting themselves up to grow, operate more efficiently, and protect profitability amid the shifting headwinds of the auto retail business.
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