Community Pulse
Insights pulled from 1,000+ dealer-only conversations across franchise and independent rooftops. You’re receiving this as a CDG Circles member.
Big picture: January is presenting a mixed market landscape. While some dealers report a slow start and even "ghost towns" for new car sales, others are experiencing an abnormally busy period, with used car demand often outpacing new. Inventory acquisition, especially for pre-owned, is a critical focus, with some noting surging prices. Operational efficiency, driven by technology adoption and strategic expense management, remains a key theme as Q4 2025 results showed a softening for many
1) AI & Tech
Advanced AI for Operations: Claude's "Cowork" agent is highlighted as "unbelievable" for data extraction and desktop task automation, acting as a "MACRO on steroids." The max plan for Claude code (Opus 4.5) costs $200/month.
Sales & Service AI Tools: Podium's AI tool, Jerry, is seeing success with website text widgets and engagement. Matador AI has facilitated sales follow-up, driving 4 car sales last week by managing 1,000 people from an Excel list. AutoAce and Pam are utilized for after-hours AI answering services, costing around $1,000/month.
DMS & IT Evolution: Dealerships are actively considering DMS switches, with Tekion and PBS being explored as alternatives to CDK and Reynolds. Some stores have successfully transitioned from CDK to Tekion in 4 years. IT support companies that understand retail automotive are highly valued.
Digital Retailing Challenges: The Routeone finance app integration on multiple websites is a hurdle, with a cost of $99 per website. Autofi, another digital retailing tool, was found to be expensive and "clunky" on the customer-facing side, leading to low engagement and short-lived usage for some dealerships.
2) Fixed Ops & Service
Service Advisor Training: Addressing a "major leak point," Assurant Dealer Services offers effective in-person and virtual training. Chris Collins' training increased gross but led to declining customer pay (CP) RO counts due to aggressive pricing and flush recommendations.
Technician Video Inspections: Incentivizing video inspections is a hot topic, with some paying $2 per RO with video or $0.1 per video, resulting in 95% consistency and increased per RO revenue for top stores. Another model offers an extra $1 per flat rate hour for 90% video and picture penetration.
Parts & Service Performance: Many dealers report service and parts departments performing strongly, with some experiencing record levels in RO count and customer pay business. However, long wait times for service (up to 3 weeks for major jobs) and delays in receiving big-ticket warranty parts from Stellantis are noted.
3) Inventory & Financials
January Sales Pace: The month started inconsistently, with some regions experiencing a "ghost town" effect, while others, particularly in the Midwest and Southwestern Ontario, reported the "best start to a January" in memory, with one dealer selling 30+ more units in the first six days.
Inventory Levels: New car inventory remains tight for many, with some Ford dealers struggling and facing OEM expectations of a 60-day supply for trucks and 45 days for SUVs. Toyota new inventory is light, and Stellantis dealers eagerly await new products like the Charger Sixpack and Gladiator Sahara to arrive.
Used Car Market: The used car market is robust, with prices "jumping" and inventory at auctions becoming "crazy, feels like Covid all over again." Inventory acquisition is a significant focus, with some dealers exploring buying pre-owned vehicles from Canada to the US.
Pay Plan Structures: Salespeople's compensation includes various models, from a $600/week salary in West Virginia to a $4,000 guarantee during acclimation for 3-4 months. General Managers' pay plans vary widely, with some paid solely on gross, leading to concerns about "give a shit factor -0-" regarding expense control. A transition to gross/net combo or net-only plans is being considered.
4) Marketing & Loyalty
Digital Advertising ROI: While Google Ads generate approximately 10% more leads than organic search and PMAX VLAs are effective, brand campaigns on PMAX are noted for generating 99% service department calls. Cars.com is being canceled by some due to poor reporting and ROI concerns.
Direct Mail Effectiveness: Mudd mailers have proven successful for some groups, with one reporting 223 units sold from a 40,000-piece mailer in November. Credit mailers range from $1.40-$1.70 per piece.
Database Management: After canceling Automotive Mastermind, one dealer lost all their data mining and marketing history, highlighting the importance of data ownership. Tools like Purecars/Autominer are used to clean and update DMS/CRM data for targeted email and SMS campaigns
Wins & Warnings
Pro & Exec members: Your 6 Wins & Warnings are below.
Which popular equity mining tool deletes all your data when you cancel? Which 'AI' vendors are just reselling $299 software at 10x the price?
Pro & Exec members find out below. Not seeing them? [Upgrade now]
Top Actions for Next Week
Circles Meeting Registration: Confirm registration for upcoming Circles meetings on January 21st or 22nd.
Review Service Advisor Training: Investigate Assurant Dealer Services and Ethos Group for best practices in service advisor training to improve customer pay ROs.
Optimize Used Car Acquisition: Evaluate AutoTrader ICO and cross-border inventory acquisition strategies, and explore tools like Precision Inventory (for Ford/Lincoln) to maintain robust used car stock.
Maximize GM IMR Funds: Connect with peers to learn strategies for maximizing GM IMR funds for technology and fixed operations investments.
Pilot AI Solutions: Identify a specific operational pain point and pilot a targeted AI tool (e.g., Claude Cowork for data extraction, Matador AI for follow-up) to begin leveraging AI efficiencies.
— CDG