The automotive world is in the middle of a revolution, and it’s happening digitally.
43 percent of dealers now offer customers the ability to complete every step of the car-buying process online, up from just 34 percent in 2022 according to the 2025 Cox Automotive Digitization of Automotive Retail study.
Even though 42 percent of dealers reported weaker profits in 2024, investment in online retailing tools continues to grow. That is because these tools are no longer just nice-to-have features. They’ve become essential for staying competitive in an evolving market.
“Forcing car buyers down one purchase path is no longer considered a best practice. Today’s most successful dealers are rethinking the retail journey—creating seamless transitions between online and in-store, powered by automation, clean data, and personalization,” said Lori Wittman, President of Retail Solutions at Cox Automotive. “This study reinforces our mission to support dealers in building the omnichannel, customer-first experiences consumers now demand. Opening all paths to purchase and connecting them is even more important in this rising cost environment we’re all facing.”
Dealers are prioritizing tools that simplify critical steps like credit applications, deal breakdowns, and selecting finance and insurance (F&I) options. Such solutions not only make transactions smoother but also cut down on in-store time, which is a benefit appreciated by both dealers and buyers. Dealers who have already optimized their digital experience have been reaping the benefits. Roughly 67 percent saw an improvement in gross profit per deal due to digital retailing while 80 percent said it had a positive impact on vehicle sales volume.
Consumers Want Seamless Experiences
For today’s car shopper, seamless transitions between online browsing and in-store visits are crucial. Cox Automotive found that 65 percent of consumers prefer to conduct at least part of the buying process online. 70 percent say that completing steps online improves their purchase experience. On average, consumers who heavily engaged in digital retailing saved 42 minutes at the dealership and 81 percent were highly satisfied with their experience. Whether it’s comparing models, applying for loans, or fully finishing the purchase, online tools have become indispensable.
Dealers know this too. 69 percent of dealers acknowledged that customer demand plays a critical role in driving the adoption of digital retailing tools. Shoppers want timesaving, efficient experiences, and dealerships that fail to deliver risk falling behind in the race. In order to keep up, fewer dealerships are handling these steps in-house. They are increasingly outsourcing online capabilities to streamline operations and cater to the growing demand for a more digitized experience.
Challenges Still Exist
However, there’s still a significant gap between consumer expectations and dealership implementation. While 85 percent of shoppers value the ability to seamlessly pick up their transaction in-store where they left off online, 97 percent of dealers report that customers often have to repeat steps. This redundancy can frustrate buyers and impacts efficiency at the dealership.
The difficulty in managing multiple digital tools and consistent online data is also making some dealers hesitant to increase their investment. 68 percent of dealers say they make customers repeat steps in store simply because they want to verify that the online information is accurate. Meanwhile, 62 percent are using multiple online retailing solutions and report issues with data inconsistencies and redundancies. A seamless digital ecosystem can greatly improve the buyer experience, but dealerships have to be able to fully control it or risk actually hurting efficiency.
AI Is Changing the Game
One of the most exciting developments in automotive retail is the growing adoption of artificial intelligence (AI). From chatbots to predictive analytics, AI is making it easier for dealerships to deliver personalized, efficient service.
AI tools can automate low-risk processes like generating tailored offers or analyzing customer preferences. Nearly 54 percent of dealers agree that AI boosts productivity and saves time, and among those who currently use it, satisfaction with dealership efficiency is higher.
“Speed kills deals,” said one dealer in the study. “If a digital solution got accurate info and sped up the rest of the deal, that would have a lot of value to it.”
For consumers, AI offers conveniences like 24/7 chat support or vehicle recommendations based on their search and purchase history. Younger generations, in particular, are optimistic about AI’s role, with 59 percent of Gen Z and Millennials comfortable using chatbots to answer questions and 48 percent reporting they trust AI over sales staff for basic queries.
The Adoption Gap
Despite these benefits, many dealers are still hesitant to fully adopt AI-led solutions. Only 29 percent of dealers are currently using an AI chatbot, while even fewer are using predictive insights (17 percent) and automated offers (14 percent). Part of that is simply a knowledge gap. While 93 percent of dealers are at least aware of an AI-powered tool, only 64 percent say they are familiar with one. That’s also mainly for chatbots, those numbers drop below 50 percent when asked about generative or automated tools.
While 83 percent of consumers think AI will shape the future of automotive retailing, only 37 percent of dealers currently believe AI is important to their operations. However, those using AI now are far more likely to see higher customer satisfaction rates and faster deal closures.
Digital Dealer Conference & Expo is coming to Mandalay Bay, Las Vegas, NV this October 14-15! Register today and see great exhibitors like Cox Automotive at Booth #503.
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