Artificial intelligence is already influencing which cars consumers buy, which dealerships they contact and how retailers respond to their enquiries.

It is also helping dealers choose stock, answer customer calls and automate tasks previously carried out by employees.

Wherever you look, AI is radically reshaping the motor trade – but where are the biggest changes happening right now? And what’s coming next?

To complement AI Week – which runs from August 3-7 – Car Dealer has produced a special two-part podcast series in which experts and dealers detail the structural shifts the motor trade is experiencing thanks to AI.

In part one (above) of The AI Revolution: Will it change the motor trade forever? expert Ben Harratt explains how he believes nearly every car sold is now influenced by AI in the buying journey somewhere.

From Google searches powered by Gemini, to detailed analysis of the right models to buy in other LLMs, AI is becoming one of the biggest influences on consumers.

Harratt said: ‘Today there is almost certainly not a single new car being sold where AI hasn’t been used, at least in the discovery part for the customer or the research stage.

‘I think it’s so ubiquitous now. If I was speccing up a new car today, I wouldn’t be reading 20 web pages. I would be talking to a frontier model in AI.

‘I think you’ve definitely seen AI infect every single transaction.’

Car buying

Car dealers report that more and more enquiries they’re sent are these days clearly written by AI. They’re easy to spot thanks to a formulaic approach and the level of detail the questions go into. 

While many find this frustrating, most are using AI to reply back to the customer – so how long before customers’ and dealers’ AI agents negotiate between themselves? 

‘AI will be acting on behalf of buyers to do some of that job,’ predicted David Sykes from used car marketplace Autotrader.

‘I don’t think it’s likely to go from start to finish and actually make a purchase on behalf of consumers, but I can see it helping to certainly shortlist models and potentially shortlist specific vehicles.’

Neither Sykes nor the other podcast guests suggested that fully autonomous negotiation was imminent. But, with consumers already using AI to prepare enquiries and dealers deploying AI to respond to them, the direction of travel is clear.

Sykes added that the firm had certainly seen more consumers using AI models to narrow down their choice of car and shortlist suitable vehicles before beginning their search in earnest.

This increased use of AI at the discovery phase could be dangerous for dealers who don’t appear in results. 

Motorway boss Tom Leathes said dealers should investigate how they appear in large language models and try to ensure they’re on the recommendation lists.

Poor reviews on Google or Trustpilot could make a dealership less likely to feature prominently in AI-generated recommendations of car dealerships, he warned.

Leathes added: ‘Trustpilot, Google reviews, anything that’s out on the internet or on Reddit about your business, feeds into the AI systems that customers are using to find their next car.’

Leathes explained he had also witnessed a growth in the number of dealers harnessing the power of AI to build tools to help them buy cars in his daily auctions.

While this was limited to a handful of technically advanced dealers last year, he said it has now become far more widespread as tools like Claude make it easier to build solutions without a large development team.

Leathes said some dealers were now linking auction listings with their own historic sales, margin and retail data to create AI-powered buying recommendations.

He said these systems can identify which vehicles a dealership should bid on, recommend a maximum price and explain why a particular car fits its stock profile.

Job losses

In the podcast, Dealerkit co-founder Oliver Green says he suspects dealership administration roles could be first to go as AI gets ever more sophisticated.

He believes AI will soon take on a large proportion of repetitive computer-based tasks across accounts, advertising and marketing, as well as deal with the lion’s share of leads.

Green doesn’t think every role in a dealership will disappear, though – but he says they will change radically.

‘I think if you’d gone back 10 years and asked people whether a warehouse could be fully automated, the answer probably would have been no,’ explained Green.

‘We’e fast being proven that it’s not only possible, but it’s the most efficient way to do it. So yes, ultimately, I think a large portion [of car dealer tasks] will be able to be automated. I wouldn’t say all of it, but a large portion.’

On the flip side, the benefits to the customer of getting AI assistance quickly is key. Many dealerships are dabbling with AI-powered booking systems, lead answering services and even voice calls.

Impel said its research has found some 40% of calls to a typical car dealership service department go unanswered and that’s a major opportunity for AI.

‘The consumer experience is very poor [when calls don’t get answered],’ explained Leese.

He said new AI voice products are getting better all the time and richer thanks to access to dealership’s data sets, the latter of which is key.

Leese warned, though, that simply installing an AI voice assistant would not solve the problem.

Unless the technology can access live workshop bookings, service prices, courtesy-car availability and vehicle status information, it can only promise that somebody will call the customer back.

‘That experience is no better than me leaving a voicemail,’ he said.

‘The big change for this isn’t about how good the technology is; it’s how it gets to the information.’

Impel has now dealt with more than 600,000 leads and had one million conversations with customers via its AI products deployed at dealerships.

‘There are so many examples where the person who submitted the lead has no idea they’re speaking to AI, because the AI is empathetic, it’s very polite, it’s having great conversations, and it understands the intent,’ added Leese.

However, he also cautioned that AI would not automatically suit every dealership. Some businesses do not have enough enquiry volume, sufficiently structured processes or the quality of data required to make the technology effective.

The clearest message from the podcast is that AI is unlikely to arrive in dealerships as one dramatic replacement for existing systems or staff.

Instead, it is being embedded gradually into vehicle discovery, advertising, stock acquisition, lead management, telephone handling, workshop bookings and administration.

The question for dealers may therefore no longer be whether they use AI, but whether they understand where it is already shaping their business – and whether their people, systems and data are ready for what comes next.

Part one of The AI Revolution: Will it change the motor trade forever? is available now wherever you get your podcasts including Spotify, Apple Podcasts and YouTube. Part two, featuring car dealers discussing how they are using AI in their own businesses, will be published later this week.