Welcome to another edition of the Car Dealership Guy Podcast Recap newsletter—the key lessons from top operators, founders, and execs shaping the future of auto retail.
Today’s guest is Eric Rea, CEO of Podium.
We dive into the state of Dealership AI in 2025, reveals the questions dealers should be asking to stay ahead, discussed why 10% of U.S. dealers are using Podium's AI, and much more.
Startup mentality is keeping established tech companies competitive.
Even after 11 years in business, maintaining founder-level urgency and long-term thinking drives sustained success in the rapidly evolving AI landscape.
"We've been going for 11 years, that's one of the secrets, just keep going and don't run out of money. We've had a lot of ups, some down as every business has, and you do kind of learn that over time. If we just keep going and we don't make like fatal mistakes, it will become something great."
Time becomes a compounding function, especially when navigating the challenges of implementing AI across diverse dealership operations.
Dealers are showing more interest in AI but sustainable value remains elusive.
While more dealerships are testing AI solutions, keeping them engaged requires continuous value delivery beyond initial demonstrations.
"Dealers...they'll try anything. They're very exploratory and just because somebody buys your product doesn't mean they're gonna keep using it. You got to continue to provide value for these guys, or else they're gone."
It's easier to create compelling demos than real-world solutions that handle the thousand different variations of how customer interactions actually happen.
Service is becoming the next big opportunity for AI implementation.
Most AI focus has been on sales operations, but service departments represent significant untapped potential for automation and efficiency gains.
"We started in sales, because that's where we've sold into the GSM and the GM for the last nine years...because the GM typically cares way more about sales than service. Although, I think it's up for debate whether that's actually the right thing."
Dealerships could be missing huge opportunities by not prioritizing AI applications in their service operations.
AI customization needs are varying dramatically between store types.
Tailoring AI systems to fit specific dealership cultures and customer bases is proving essential for successful implementations.
"Even within Van Horn, the Toyota dealership works completely different than the Ford...you go to the Beverly Hills dealership that's selling BMWs and Mercedes, they want a totally different Jerry than the Toyota dealership in Atlanta."
One dealership might want AI to be very assertive and high-pressure, while another store might desire a more concierge-like approach to customer interactions.
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3. Podium - Don’t miss another lead. With Podium’s AI BDC, dealerships are seeing an 80% increase in after-hours appointments by handling leads 24/7. Instantly respond to inquiries, book test drives, and let your team focus on what matters: closing deals. Learn how Podium can help you sell more cars at podium.com/car-dealership-guy.
AI capabilities are improving faster than expected.
The guardrails and training methods for AI systems have evolved rapidly, making customization much more efficient than previous approaches.
"Initially, before the reasoning models came out, it was like strict guardrails...it was very labor intensive because engineers had to actually do that. Now...through interviewing this dealer, we can come up with the general policies and procedures of how a BDC works."
This evolution makes it much more efficient to meet the specific operational needs of individual dealerships.
Complete BDC replacement isn't necessarily the primary goal.
Dealerships are taking two distinct approaches to integrating AI into their existing business development operations.
"We have some of our dealers that are opening up new dealerships, and they're gonna try to not have a BDC team now because they think Jerry can do a great job. Others are using it as like a co-pilot, like supercharging their BDC team, which I think is the most common thing."
Dealers should be wary of any tech company claiming their solution can totally replace BDC functions from the start.
Getting BDC teams to embrace AI is proving critical for success.
Much of the friction around AI implementation comes from frontline employees rather than technical challenges.
"Some of them see it as competition, like my job's going away and I need to compete against this...They're like basically rejecting it, and they're trying to actively fight against it. And then we're seeing other people that see this as a way to make themselves 10 times more productive."
Individuals need to view AI as an opportunity to become more fluent with technology that's not slowing down.
AI efficiency advantages are becoming undeniable for certain processes.
Early implementation strategies revealed important lessons about the quality of existing dealership communication practices.
"We thought...when we set up a dealership, we could take all of their text messages and use them to reinforce the model and make it better. And when we tried that, it turns out that there are so many bad habits that it actually made things worse."
AI simply performs certain business functions more efficiently and consistently than human employees.
Dealers need to know what they're looking for in AI solutions.
Asking the right questions becomes crucial when trying to identify the best technology for specific dealership needs.
"You're not buying software. You're not buying features. You are buying a person, an AI employee that is gonna talk to your customers every day. And so you gotta ask questions like you're interviewing a new BDC rep."
The evaluation process should resemble interviewing a new employee rather than purchasing traditional software.
AI development is evolving at unprecedented speed.
The pace of AI advancement is exceeding even industry insiders' expectations for improvement and capability expansion.
"A year ago...we thought it was gonna get much better, but I didn't think it was gonna get so much better so fast. Every week, a new AI model is being revealed that exceeds previous expectations."
AI agents are becoming increasingly sophisticated and will continue expanding their capabilities in automotive retail applications.
