How AI Will Accelerate Dealership Revenue Growth in 2025

As the world increasingly embraces artificial intelligence (AI), its potential to revolutionize business operations is becoming more apparent than ever. AI holds the promise of enhanced data analysis, improved customer experiences, automated business processes, and streamlined decision-making. 

While there is a growing acknowledgment of AI’s transformative power, the automotive industry has historically been slower to adopt new technologies. As AI continues to advance rapidly and integrate into our daily lives, car dealerships are increasingly accepting that AI adoption is not only unavoidable, but will soon be a determining factor in driving future business success. 

Report: AI Implementation is Driving Substantial Revenue Growth for Dealerships

Artificial intelligence is already demonstrating its ability to boost revenues for automotive dealerships across North America. According to Fullpath’s recent report titled “The 2025 State of AI Adoption in Car Dealerships,” which surveyed over 200 general managers, dealership owners, and executives, 100% of dealerships that have implemented AI reported an increase in revenue over the past year.

The evidence is compelling. When dealers learn to fully leverage AI, the technology in turn maximizes their dealership’s growth potential. In this blog we will do an in-depth review of the findings in this report, highlight the significant shift the industry has seen in mindset towards AI, and review the impact AI is already having on dealership revenue and overall business performance.

AI’s Impact on Dealership Revenue

The finding that 100% of dealerships implementing AI have reported an increase in revenue over the past year underscores the undeniable impact of AI technology on dealership performance. Not only have these dealerships experienced growth, but 81% of them are also anticipating an increase in their AI budgets for 2025, which signals a strong commitment to the continued integration of AI within their operations. This commitment further reinforces the notion that AI is not just a passing trend but a crucial element of modern dealership strategy.

A significant 55% of survey respondents reported a revenue increase of over 20%. This highlights that, not only are dealerships reaping the benefits of AI, but many are achieving substantial revenue boosts as a direct result of their investments in this technology. The data indicates that 19% of respondents reported increases of 10-20%, while 26% experienced more modest gains of 1-10%.

Building on this, 26% of dealerships reported a modest increase in revenue of 1-10%. However, when we look at the growing trend of dealerships increasing their AI budgets, it becomes evident that there’s more at play than just financial returns. Dealers understand that the benefits of AI extend beyond immediate revenue gains, as the AI they have implemented shows enhancements in customer relationship management, fraud detection, inventory management, and more.

One notable aspect of the report findings is that no dealership reported a decrease in revenue following AI adoption, underscoring a consistent positive trend in ROI across the board, regardless of dealership size or number of vehicles on the lot. Dealerships are recognizing that investing in AI technology not only pays off in terms of revenue growth, but is also playing a major role in helping them stay competitive. 

Anticipated AI Budget Increase

The survey indicates that 81% of dealers expect an increase in investment in AI in 2025, making it essential to consider the significance of these planned budget adjustments. Notably, 34% of surveyed dealerships are gearing up for an increase of 11-25%, while 18% are committing to an even more substantial boost of 25% or more. 

For many of these dealerships, AI is still a relatively new frontier, making these increases all the more noteworthy. This commitment signifies a growing recognition of AI’s potential to drive operational efficiency and enhance customer engagement.

The correlation between these planned budget increases and the positive return on investment (ROI) reported by dealerships cannot be overlooked. Dealers are not just allocating more funds to AI for the sake of technology, but doing so with the expectation of continued ROI as they learn to leverage AI’s full capabilities.

Among the dealerships that plan to decrease their AI budgets, the majority—8% from a total of 12%—are looking at reductions of less than 10%. This modest decrease suggests that they are not necessarily dissatisfied with their experience using AI, but instead may indicate broader budget constraints or changes in their operational strategy that warrant a slight adjustment in their AI spending.

This leaves only 7% of dealerships that are not planning to change their AI investment at all in the coming year. For this small percentage of dealerships, it may simply be a case of allowing some additional time for the new technology to integrate into their operations fully, or that they are satisfied with their already integrated AI solutions.

The overall trend indicates a strong desire among automotive dealerships to embrace the benefits of AI. Even those cautious about fully committing to expansion are still engaged with the technology. This willingness to invest signals an industry poised for transformation, as dealerships recognize the invaluable role that AI can play in enhancing their competitive edge and improving overall customer experiences. 

How Dealerships are Using AI to Enhance their Revenue

To truly understand the impact of AI on dealership performance, it’s important to break down the various ways this technology contributes to revenue increases. 

Email Marketing Efforts 

Dealers leveraging AI to send personalized emails at scale are seeing remarkable results, with an average open rate of 50.7%—well above the industry standard of 15%. When it comes to automotive marketing emails, AI assists with:

• Granular audience segmentation, 
• Email personalization based on the individual shopper’s needs and preferences, 
• Automated content generation,
• A/B testing subject lines and content placement,
• Managing t email sending to ensure relevant content reaches the right people at the right time. 

24/7 Customer Support 

AI driven chatbots and SMS systems offer dealers the ability to provide shoppers and customers with two-way communication and support around the clock. While standard generative AI can scour the internet to answer questions about the basic features of a vehicle, only a trained AI that has been fully integrated into a dealership can provide specific answers about:

• Current inventory and stock levels,
• Specific features of available vehicles,
• Financing options offered by the dealership,
• Appointment scheduling and booking test drives.

Taking it up a notch, an advanced AI chatbot can re-engage customers returning to the website by providing information about vehicles they’ve previously viewed or sending information on related vehicles that can also match their needs.

Digital Advertising Optimization

Dealers utilizing AI for digital advertising are likely to see improvements in targeting and budgeting optimization. With the ability to analyze vast amounts of data in real-time, AI optimizes ad placements and strategies for better engagement. Specific benefits of AI in digital advertising include:

• Dynamic audience targeting based on behavioral insights,
• Real-time bidding to maximize ad spend efficiency,
• Creative optimization through A/B testing of ad visuals and messaging,
• Performance tracking with predictive analytics to identify and scale successful campaigns,
• Personalized ad experiences that cater to individual shopper preferences.

Targeted emails and personalized website experiences, as well hyper-specific ads and timely service reminders, may initially appear to be separate tasks requiring significant time and effort from an individual or a dedicated team. When AI tools are implemented at a dealership, these activities can be automated, freeing up the dealership team to focus on tasks that require higher levels of human intervention and critical thinking. 

How Leveraging AI Can Boost Dealership Revenue

The findings from “The 2025 State of AI Adoption in Car Dealerships” report highlight crucial insights into the impact of AI on dealership performance. Here are the key takeaways:

• Universal Revenue Growth: 100% of dealerships that have implemented AI report an increase in revenue over the past year, demonstrating AI’s powerful influence on financial performance.
• Budget Commitment: 81% of surveyed dealerships plan to increase their AI budgets in 2025, with 34% expecting increases of 11-25% and 18% planning increases of 25% or more. This commitment signifies recognition of AI’s value in driving dealership growth.
• Substantial Revenue Increases: Within the survey, 55% of dealership executives reported revenue increases of over 20%, indicating that AI contributes significantly to financial success.
• No Reported Decreases: Notably, no dealership reported a decrease in revenue following AI adoption, underscoring a pervasive positive trend in the industry.
• Ongoing Engagement with AI: The majority of dealerships are either increasing their AI investment or maintaining their current levels, reflecting a strong willingness to continue leveraging AI technology for operational success.

These findings underscore that AI is not just a passing trend, but is becoming an essential component for dealership success in the competitive automotive landscape.

As automotive dealerships prepare for the future, embracing AI will be crucial for enhancing customer engagement and driving continued revenue growth. Dealerships are encouraged to explore AI technologies and identify opportunities for integration that align with their goals.

For more industry insights and a closer look at expected trends on AI in 2025, you can access Fullpath’s full report here.