Car dealerships are embracing artificial intelligence (AI) at unprecedented rates, with 81% of dealers planning to increase their AI budgets in 2025, according to Fullpath’s latest report. The report shows that AI is transforming dealership operations, particularly in marketing, sales, and customer service, with significant returns on investment (ROI).
“The automotive industry is poised for a major leap forward with increased AI investment, which can fundamentally change how dealerships operate and interact with customers. The anticipated growth in AI budgets underscores dealers’ commitment to leveraging technology for enhanced competitiveness and success in the evolving marketplace,” Ilana Shabtay, VP marketing at Fullpath.
The report highlights that 34% of dealerships already use AI for marketing and advertising, with 55% reporting a 20% or greater increase in ROI. In addition, AI implementation has driven revenue growth, with 55% of dealerships experiencing a 10–30% increase in 2024 revenues.
The financial benefits are prompting widespread support for expanded AI budgets, as 34% of respondents anticipate an 11–25% increase in their 2025 AI allocations, while 18% foresee boosts exceeding 25%.
AI adoption isn’t confined to marketing. Customer relationship management leads to current AI usage, followed by applications in sales, customer service, fraud detection, and predictive maintenance. General managers (25%) and dealer principals (22%) are particularly vocal about the need for increased investment, reflecting the confidence that first-hand success with AI fosters.
Contrary to fears about job displacement, 72% of respondents agree that AI improves human performance rather than replacing employees. This perspective emphasises the role of technology in enhancing efficiency and decision-making across dealership operations.
By automating routine tasks and providing actionable insights, AI allows staff to focus on high-value customer interactions, fostering a partnership between technology and human expertise.