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 Chase Abbott, VP of Sales at Cox Automotive.
We get into where dealers are falling behind, why ecosystem-level integration matters, and how to overcome resistance to new tools.
Margin compression is back and dealers must adapt their approach.
The post-COVID inventory shortage created a seller's market, but those conditions are gone and customers have regained negotiating power.
"Grosses are starting to tighten. I think we're also coming off of a high post-COVID where inventory was really low and it was about finding a car more than anything. When margin compression's back and inventories back, you've got to double down on experience."
Dealers can no longer rely solely on price and availability. Instead, they must invest heavily in customer experience and refine their online merchandising strategies to differentiate.
Affordability and negative equity are dealers' biggest tactical problems right now.
The aggressive loan structures dealers used during the pandemic created a wave of negative equity that's now crashing into 2026.
"We can't forget like when everybody dropped four, five, six pounders on all these people four or five years ago, we set the course for negative equity in the next trade. The equity issue is a real issue and LTV trying to get them out of that car."
Even when deals can be structured, banks are rejecting them based on debt-to-income ratios, creating a hangover that mirrors the old Town & Country problem where customers were too far upside down to work with.
Bolt-on tech without integration creates chaos instead of efficiency.
Many dealers assemble their tech stack by selecting individual best-of-breed solutions, but without proper integration they force managers to re-enter the same customer data across multiple systems.
"What you really just did was install chaos because now as a desk manager I've got to reenter the customer's address four times to do a deal. We know CSI plummets in the dealership after 90 minutes. 40% of the customers time when they're in store is idle."
Every minute spent re-keying data is a minute not spent engaging the customer, and idle time gives customers space to assume the worst about the deal.
Dealers using five to six integrated tools significantly outperform those who don't.
Cox Automotive's internal data shows that dealerships using an integrated ecosystem of five to six tools consistently generate higher gross profit, better conversion rates, and more leads.
"We constantly look at our data sets. We have thousands of dealers. We find that the folks that make the most gross, that convert at a higher rate, that see more leads are using that ecosystem type play. For us it's around five or six. That's where we really peak at the summit of that mountain."
The key is having tools that share data seamlessly and eliminate duplicate entry across the workflow.
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AI must target customer engagement, not just internal efficiency.
Most dealers use AI to analyze internal metrics like service writer performance or salesperson activity, but Chase argues the bigger opportunity is deploying AI to identify customer buying signals.
"When I was running a store, it was really about getting more customers into the store. I think it behooves dealers and I would challenge all of them to look for an AI stack that's going to go after the customer base, not just have your salespeople maximize the lines on the RO."
Focusing AI exclusively on internal operations misses the opportunity to drive more traffic, conquest new customers, and reactivate buyers who are actively shopping.
Predictive insights deliver the clearest measurable profit impact from AI.
Cox Automotive uses AI to analyze 82 million monthly unique visitors and distill thousands of browsing behaviors into actionable buying signals that help dealers prioritize outreach.
"If I've got a 100 customers in a list and I'm working through that list, if I knew these 13 of the hundred are nine times more likely to buy a car in the next 30 days, which ones am I going to start calling first? That is all derived from the data."
This same AI also identifies "orphan" customers with active buying signals but no scheduled follow-up…pure lost opportunity that most dealers never see.
Sentiment analysis catches problems before they escalate.
Salespeople rarely admit when they've mishandled a customer interaction, which means managers often don't learn about issues until it's too late.
"When I was in the dealership, if I botched a customer, the salesperson never goes to the desk and goes, 'Hey, man, I really screwed that one up.' So what sentiment analysis does is it looks for words, particular words, contentious words in emails, texts, and it alerts the manager that there's a fire burning over here."
AI-powered sentiment analysis allows managers to step in and save deals that would otherwise be lost to poor communication or customer frustration.
Early AI adopters will dominate because they can scale faster and fail faster.
The biggest barrier to AI adoption isn't capability or cost—it's the pain of change and general skepticism from dealers who don't yet understand what they're missing.
"When it comes to innovation, you're either the steamroller or you're the road. Dealers really need to understand that when it comes to AI, the early adopters are going to box everybody out of the paint because they can scale great things much faster."
Dealers who wait for perfect proof will find themselves competing against stores that have already refined their AI workflows and captured market share.
Only 15% of franchise dealers have truly integrated AI into daily workflows.
Cox Automotive surveyed 516 franchise dealerships and found that while three out of five are exploring AI and 25% are in wait-and-see mode, only 15% have embedded it into operations.
"Dealers who have fully adopted and optimized AI are 50% more likely to report revenue growth, efficiency gains, and higher profitability. The risk isn't trying it, it's the risk is not trying it."
Chase's advice is simple: fail fast if you must, but don't sit on the sidelines while competitors build a structural advantage.
Dealers must inspect what they expect before committing to any AI vendor.
Too many dealers make buying decisions based on demo presentations without pressure-testing how the tool will perform in their actual workflow.
"Dealers struggle with that. They do the demo. We do a good job of the demo because we're supposed to. We sizzle. We sell the steak and then they get live and they're like, 'Oh, I didn't go deep enough on that and this doesn't do what I'm used to.'"
Chase recommends going deeper during evaluation, understanding post-sale integration, and setting clear KPIs for success and failure before making a commitment.
