Leveraging AI: A New Era for Car Dealerships

Common Dealer Concerns

It’s not if, it’s HOW every business in the world should be implementing artificial intelligence to streamline everyday processes. And car dealerships are no exception to that, there is so much time to be saved and money to be made just by getting to know these tools and having an open mind.

In March of 2023, CDK Global a leading software and data provider in the automotive industry did a survey on what dealers think about Artificial Intelligence. The three main concerns that dealers think are solvable by AI are:

1. Resolving employment challenges (57% Respondents) 
2. Attracting new customers (44% Respondents) 
3. Acquiring and managing inventory levels (49% Respondents) 

What stands out the most to us in this report is not only half of the dealerships in the survey are struggling with inventory acquisition (much higher in real life) but they also believe that AI can potentially fix their acquisition concerns.

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Shifting Mindsets

This reality is both relieving and scary.

It’s relieving because dealers are infamously known for not being the first industry or vertical to take on the new technology trends. Although, with AI it seems like a decent percentage of dealers are open to implementing new tools and processes in their dealerships to compete with new market forces. 

On the other hand, it’s scary because AI can’t fix everything. And we don’t want dealers to think that buying a single tool can turn their store around overnight. Some of these concerns have deeper-rooted issues that all the software in the world won't fix. When thinking about used vehicle acquisition concerns, most of the problems aren't difficult fixes at all. Actually building a successful acquisition strategy and process typically starts with just a simple mindset shift. 

Typically that mindset shift is accepting that the private party market isn't going anywhere, it's only getting bigger. Auctions are only getting more expensive and competitive. And that you need to take the problem into your own hands by building out a process or team to go after these privately listed vehicles. 

Once we have this mindset (you might already be thinking this way) then we can start leveraging AI to scale your team and overall acquisitions. Let's find out how AI can ACTUALLY help you buy more cars. 

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How dealerships should be using AI to scale private party purchases: 

Sure you don't need car dealership software to buy cars off the street. You can scroll endlessly on Craiglist and email sellers directly. Will you put up impressive numbers? Probably not. Will you turn a profit? Maybe. Should you leverage tools that do all the busy work for you so you can fill your pipeline with active seller intenders so you can increase purchases month over month? You know the answer….

Here are some different things AI and advanced technology can help you with when going after the private party market. 

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1. Targeting Local Listings 

Instead of manually searching every platform one by one. There are market scanning tools that will do the heavy lifting for you. Ai will find the exact vehicles you looking for across all platforms (Craigslist, FB Marketplace, CarGurus, Autotrader, cars.com, and more). 

2. Automated Vehicle Inspection

AI technology can also streamline the vehicle inspection process. Using image recognition and machine learning algorithms, AI can filter out the vehicles that don't make business sense such as Salvage titles, Dealer listings, rebuilt motors, etc. 

3. Optimizing Pricing Strategy

Eventually, the in-house buyer will have to perform their own book of each vehicle, but why spend time on booking out every vehicle when most of them aren't in your wheelhouse? That is why using automated booking tools that run every VIN through Carfax and your preferred booking method (MMR, KBB, JD Power) so you can get an idea of how close you are at a glance and not waste time on cars that don't make sense.  

4. Predictive Insights and Suggestions

There are tools that exist today that can analyze data from various sources such as market trends, consumer behavior, and historical sales data to predict the types of vehicles that perform the best for your dealership. This insight allows dealerships to focus on acquiring vehicles that will maximize profitability.

5. DMS Integrations 

Cross-platform compatibility and integrations can save your dealership hours and hours by being able to connect so you can get a snapshot of performance and profitability without having to scour through all of our different software tools. With some advanced tools out on the market, you can use one tool to help you buy a car and another to track the sale of the car and even re-sell another car while being able to track all the data without you having to lift a finger. 

6. AI-Powered Virtual Assistants

Through the power of automation and machine learning you can transform the way dealerships interact with potential sellers. These AI-powered tools can provide instant messages to sellers depending on where they're at in the buying funnel. For example, If a seller has had their vehicle listed online for longer than two weeks you can automatically send them an email asking about the status of the deal. 

7. Enhanced Organization & Management

One of the difficulties with having multiple buyers working in the same market is organization and communication. We want to try and avoid any overlap as well as eliminate any repetition or confusion in communication between decision-makers and buyers. This is why having a vehicle acquisition management tool is critical so buyers can be assigned vehicles, communicate within the platform, and get target prices without having to pick up the phone or leave their office.

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Conclusion

In the fast-paced used car market, dealerships need to innovate and adapt to stay competitive. AI offers a powerful solution to streamline operations, gain valuable insights, and ultimately acquire more used vehicles. By harnessing this technology, dealerships can unlock new opportunities and drive higher profits in the used car market.

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About VETTX

VETTX is a software company based out of Chico, CA that is helping dealers take back their local markets by giving them tools to acquire more inventory off the street faster at lower cost. Through AI and automations the private party market is consolidated and cleaned up, vehicles are pre-vetted with soft book values, and seller communication is all housed under one platform with integrations with major DMS, Phone/text, and email providers.

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