Adapting To The Future of Car Sales As A Dealership
A new car dealership is like an open book, waiting to be filled with stories of happy customers and successful sales. But when the pages are filled with sales data instead of consumer satisfaction, it’s clear that something is amiss. As dealerships transition to the future of car sales, improving performance metrics will increase profitability and foster a healthier business model. In this article, we'll explore how to increase dealer profitability by adapting to the future of car sales as a dealership.
One solution to improving performance metrics and transitioning to the future of car sales is AI for car dealerships. AI can help dealerships identify and target potential customers to improve sales, enhance the customer experience, and increase profitability.
Current State of Car Sales
After a couple of rocky years thanks to the pandemic, supply chain meltdowns, and global economic uncertainty, the international car market is finally picking up speed again, and not just crawling, but gaining real momentum. For the first time since COVID, global car sales exceeded pre-pandemic numbers.
That’s a big deal. In 2024, car sales hit about 78 million units worldwide. That’s up from 75.3 million in 2023, and more importantly, it’s a sign that the industry has officially bounced back past pre-pandemic levels.
The Rise of Digital Marketplaces and Direct-to-Consumer Models
The internet has transformed just about every aspect of the car-buying process. Nowadays, shoppers aren’t strolling into a dealership with no research, far from it. Instead, they’ve already been online, reading reviews, comparing specs, watching videos, and, more often, completing the entire purchase without ever setting foot in a showroom.
Your Customers Are Online, And So Are Their Expectations
Let’s start with the obvious: over 90% of car buyers research online before deciding. They read reviews, compare vehicles, check prices, and look at third-party listings. When many of them talk to a salesperson, they’re often more informed than the person selling the car.
In 2019, 80% of car buyers already used third-party sites to guide their decision. That same year, 83% said they wanted to save time by shopping online. These aren’t trends anymore, they’re expectations.
COVID Accelerated the Shift to Online Car Sales
Before the pandemic, only about 4.2% of car sales were made online. That number jumped quickly when lockdowns forced dealerships to pivot. Suddenly, the industry had to meet customers where they already were: on their phones and laptops. And it worked because that’s what buyers wanted all along.
By 2020, companies like Carvana were booming. They sold 244,111 cars that year, up 37% from 2019, and by 2022, they were closing in on half a million cars sold annually. In 2024 alone, their website saw 195.2 million visits from over 91 million unique users. That’s not just convenience, that’s demand.
Tesla Set the Tone for Online Car Buying
Tesla didn’t wait for the world to go digital; they leaned into it early. As far back as 2019, Tesla closed all its retail stores and committed to selling new cars entirely online. It was a bold move, but it worked: by 2024, Tesla commanded 48.2% of the EV market and drew 374 million website visits from nearly 169 million unique users.
Tesla proved that direct-to-consumer, online-only car sales aren’t just viable—they’re scalable and profitable.
Why This Works for Consumers
In the traditional dealership experience, customers spend three or more hours in the showroom, dealing with:
- Paperwork
- Price negotiation
- Upsells
Compare that with the ease of clicking through a well-designed website, getting financing, and scheduling delivery from home. Digital car-buying platforms like Carvana, Vroom, and Tesla offer a massive leap in efficiency. They strip away the pressure, the haggling, and the time sink. For a growing segment of buyers, that’s not just a preference. It’s a requirement.
What This Means for Traditional Dealerships
It’s not all bad news for dealers, but there is pressure to evolve. Digital-first services are disrupting the old model, and dealerships that resist modernization may be outpaced. Consumers are showing they want more control, more convenience, and less friction.
Dealers that can meet them in that digital space, whether through hybrid models, enhanced online listings, or streamlined e-commerce platforms, will stay relevant.
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AI-Powered Personalization and Predictive Selling
Most customers don’t want to be “sold to” anymore. They want a tailored experience where the car, the financing, the follow-up, and even the tone of communication all feel like it’s made just for them.
That’s where AI comes in. It’s not just a buzzword: it’s becoming a behind-the-scenes powerhouse for dealerships, helping sales teams connect with the right customers at the right time and with the right message.
From Cookie-Cutter to Custom
Traditional dealership marketing often feels generic: mass emails, bulk SMS campaigns, broad offers that don’t hit the mark. But with AI-powered personalization, you can now tailor the entire buyer journey. A customer has been browsing mid-sized SUVs online, watching test drive videos, and clicking on a lease calculator.
AI can track those behaviours and serve them highly relevant ads, email follow-ups, or even in-app messages, offering what they’re already interested in. This level of personalization feels less like marketing and more like helpful guidance, which is precisely what modern buyers are looking for.
Predictive Selling: Selling Before They Ask
Predictive AI goes beyond reacting to buyer behaviour: it anticipates it. It forecasts customer needs before they're expressed by analysing purchase history, online activity, service records, and market trends.
For instance, it might prompt an early lease upgrade, suggest an EV trade-in based on browsing habits, or highlight safe, flexible options to someone searching for teen car insurance. It’s all about delivering the right message at the right time.
Better Leads, Not Just More
AI can also help sales teams spend their time where it matters most. Instead of sifting through endless cold leads, predictive scoring tools can rank prospects based on how likely they are to convert, using real-time data from:
- Search history
- Form submissions
- Interaction patterns
This means your BDC (business development center) or sales team isn’t just making more calls. They’re making smarter ones.
Personalised Finance Options
Another exciting piece of the puzzle is innovative financing. AI can analyse buyers' credit profiles and preferences to recommend pre-approved loan options, lease terms, or even incentives they qualify for on your website or app. No more clunky calculators or “talk to finance to find out” delays. This kind of transparency builds trust and reduces friction, two key factors that younger generations, especially Gen Z, demand in the buying experience.
Never Miss a Lead—Even After Hours
Pam's 24/7 AI receptionist never misses a call, scheduling service, or nurturing leads even when your team is off the clock. Experience the technology delivering a 20% revenue increase and 10× ROI for over 100 dealerships nationwide, with seamless integration into your existing systems like Tekion and XTime.
Pam outperforms human agents and competing AI for car dealership solutions by scheduling your personalized demo today. Implementation takes just one day. Book a demo to boost your revenue by 20%, like 100s of dealerships nationwide.
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Adapting To Gen Z Car Buying Trends
Gen Z Car Buyers: An Inside Look at Their Behavior and Preferences
Forget what you know about Millennials-they’re old news. Gen Z, a.k.a. the Zoomers, are the new kids on the block. And they’re not just tomorrow’s buyers. They’re buying now. The oldest Gen Z car shoppers are nearing their mid-20s, and many are already looking for their first vehicles.
You're already behind if you’re in the car business and still treating Gen Z buyers like you treated Millennials or Gen X. This new generation brings a unique blend of high digital expectations, low brand loyalty, and surprisingly diverse purchasing behaviours. And they’re not just tomorrow’s buyers. They’re buying now.
The Hybrid Buyer Is Here
Gen Z doesn’t just walk onto the lot and start browsing; they’ve already done their homework. They’ve watched your videos on YouTube, checked your inventory online, combed through reviews, and maybe even scoped out what your dealership looks like on Instagram or TikTok. But here's the twist: when they finally show up in person, they often:
- Restart the process
- Asking questions that they already know
- Confirming details
- Re-evaluating
That hybrid online-to-showroom journey means dealerships need a seamless digital strategy that doesn't just show cars, but builds trust, answers questions, and feels modern. The experience from screen to steering wheel should be consistent and intuitive.
Video is Key to Winning Over Gen Z Customers
If you’re not doing video, you’re invisible. For Gen Z, video is the primary language of the internet. It’s how they learn, how they explore, and how they decide. Forget glossy, overproduced ads. This generation wants authentic, engaging video content, walkthroughs, real-life customer testimonials, behind-the-scenes looks at your dealership, and even salespeople answering common questions casually on camera. The goal isn’t just to impress, it’s to connect.
Meet Gen Z’s Communication Preferences
Here’s a quick tip: if you call a Gen Z customer, they might not answer, even if they just filled out your contact form. This generation prefers messaging over phone calls, and they’re far more likely to engage with a dealership that texts them updates or follows up through platforms like:
- Facebook Messenger
- Instagram DMs
Shifting your communication style to match Gen Z's preferences can boost response rates and shorten the sales cycle.
What Are They Buying? It Depends
Gen Z car buyers are full of contrasts. While many seek affordable, fuel-efficient options due to budget constraints, 39% prefer luxury brands, more than any previous generation. Influenced by social media and, in some cases, parental support, this generation blends practicality with aspiration.
For dealers, the takeaway is clear: don’t rely on assumptions. Ask questions, pay attention, and treat every customer as a potential high-end buyer—regardless of appearances.
Forget Brand Loyalty: Focus on Experience
Gen Z buyers are less brand-loyal than previous generations, prioritising value, tech features, and seamless experiences over logos. While often perceived as values-driven, factors like sustainability may take a back seat to practicality.
For dealerships, the opportunity lies in building trust and delivering clear, consistent service. Gen Z may not stick with a car brand, but they will stick with a dealership that earns their confidence.
The Evolving Role Of Dealerships
For decades, auto dealerships were the gatekeepers of vehicle information. If you wanted to know what a car cost, options, or financing might look like, you had to talk to a salesperson. Now? Buyers show up with comparison sheets, loan pre-approvals, and reviews already in hand.
The modern customer doesn’t want to be sold to; they want support. That shifts the dealer’s role from gatekeeper to guide: someone who helps the buyer navigate their final decisions, rather than trying to control the whole process.
Experience Over Inventory: The Focus of the Future
As inventory becomes more searchable and standardized online, physical dealerships are becoming less about what you can buy and more about how it feels. Some forward-thinking dealers are transforming their spaces into experience centers where:
- Customers can test drive
- Explore customization
- Get one-on-one attention
Think Apple Store meets auto showroom. These spaces don’t push products; they build trust and deliver service before and after the sale.
Hybrid Retail Models: Seamless Transitions for the Future
Many dealerships are embracing hybrid models that combine the convenience of online shopping with the reassurance of in-person service. Customers might build and finance their car online, then schedule a pickup or test drive at a local dealer.
Or they may shop remotely and have the vehicle delivered straight to their driveway. This blending of digital tools with local expertise is a win-win: it meets customer expectations while keeping dealers in the picture.
More Focus on After-Sales Services: The Future of Dealership Profitability
As direct-to-consumer models grow and online-first platforms take hold, dealerships are also focusing on areas where they still offer significant value, namely after-sales service.
Maintenance, repairs, recalls, and certified inspections are complex to digitize fully, and local dealers still play a crucial role in keeping cars on the road. Some are rebranding as mobility hubs, offering subscription services, electric vehicle charging stations, or fleet services to adapt to shifting customer needs.
Facing the Pressure to Evolve: The Future of Car Sales Will Leave Some Behind
The truth is, not all dealerships will leap. Those who resist digital transformation or continue relying on outdated sales tactics may lose ground to more agile competitors. But those that adapt can remain a powerful and relevant force in the future of car sales, by:
- Embracing tech
- Rethinking the customer experience
- Finding new ways to add value
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Book a Demo to Boost your Revenue by 20% (Trusted by Hundreds of Dealerships Across the Nation)
Pam's 24/7 AI receptionist never misses a call, scheduling service, or nurturing leads even when your team is off the clock. Experience the technology delivering a 20% revenue increase and 10× ROI for over 100 dealerships nationwide, with seamless integration into your existing systems like Tekion and XTime.
Pam outperforms human agents and competing AI for car dealership solutions by scheduling your personalized demo today. Implementation takes just one day. Book a demo to boost your revenue by 20%, like 100s of dealerships nationwide.