Circles Weekly · March 6 – March 12, 2026

Based on 1,000+ dealer-only conversations across franchise and independent rooftops in CDG Circles.

Big picture: Operators are navigating a dynamic market where new-car traffic is below expectations, while used-car sales are showing positive momentum. A strong emphasis is placed on enhancing efficiency and reducing costs through strategic technology adoption, which optimizes everything from website performance and inventory management to back-office functions and customer engagement. There's a notable strategic shift in digital marketing, with some dealers re-evaluating substantial third-party listing expenses in favor of direct website traffic and advanced retargeting. Fixed operations remain a key area for profit enhancement, driven by aggressive warranty rate management and new tooling implementations.

Warranty Rate Management: Dealers are actively increasing warranty labor rates and optimizing parts matrices, with one reporting a 20% increase on warranty parts markup before year-end. Internal annual submissions for labor rate increases have yielded significant gains, with one dealer noting an additional $20,000 to $30,000 in labor gross. Utah was highlighted for its dealer-friendly reimbursement laws.

To protect Warranty Labor Rate Increase (WLRI) applications from employee pricing impacts, it was recommended to provide employees a "refund" for service work during the RO count period instead of direct discounts.

Shop Supplies & Policy Benchmarking: Policies for shop supply charges vary, with reported percentages from 0% (in California) to 13% of labor, and caps ranging from $35 to $92.89. A flat fee of $2.50 for oil changes was also mentioned. NADA guidelines for policy expense as a percentage of Service Department Gross Profit are cited as 2.3% for domestic, 2.0% for volume import, and 1.7% for luxury brands.

Video MPI Adoption & Challenges: Video Multi-Point Inspections (MPIs) are gaining traction, with some groups tying completion to technician bonus tiers and using gift cards for recognition. While recognized as a strong indicator for financial and customer satisfaction, operational friction is noted in achieving consistent technician buy-in. Platforms like Xtime and TruVideo are utilized for video MPIs.

Third-Party Listing Re-evaluation: A notable trend is the critical re-evaluation of high-cost third-party listing platforms. One dealer plans to cut $30,000/month from Autotrader, Cars, and CarGurus, redirecting these funds to direct website traffic and retargeting. Another achieved their best year for used-vehicle sales in 2025 (41 units/month, +21% YOY) by eliminating third-party listings in mid-2024, instead investing $5,000/month in VLA and Meta carousel ads and $2,000/month in SEM. While some report strong ROI (e.g., 15.50% closing ratio with 272% ROI dealer-reported for CarGurus), others highlight low closing ratios due to customer defection and platform retargeting.

Website Optimization & AI Marketing: Dealers are prioritizing website optimization for lead capture. Custom Call-to-Actions (CTAs) such as "Send Out the Door Pricing" and "Talk to a Manager" are reported as highly effective. Continuous optimization based on heat maps, colors, CTA sizing, and mobile-friendliness is crucial.

The concept of "vibe coding with AI" is enabling custom tool development, like Chrome extensions, to integrate data for pricing and inventory. One dealer is rebuilding their entire website with AI, aiming to reduce monthly costs from $3,200 to $700 annually.

Targeted Lead Generation: Strategies to drive new car showroom traffic include service equity mailers, handwritten letters to new residents, local business sponsorships, and heavy equity mining. For social media, a detailed job description was shared for a Social Media Manager, with a compensation range of $600-$1,000/month, focusing on 3-5 posts/week across platforms (Facebook, Instagram, TikTok, YouTube).

DMS Ecosystem & Integration: The choice and integration of a DMS are key. Reynolds recently launched automatic deal posting and is seen as competitive, particularly when considering the costs of replacing integrated products and adding third-party vendor expenses to alternative DMS platforms. Tekion users reported significant time savings in posting deals and statements, along with faster deposit and bank reconciliation. However, operational friction related to Tekion onboarding and support prioritization (AI-first, then human) was noted. Free access to Opentrack API for DealerTrack DMS users presents an integration opportunity.

Advanced Inventory Management: Dealers are leveraging sophisticated Inventory Management Systems (IMS) for pricing intelligence and proactive action suggestions. An existing API account, previously acquired by CarsCommerce, still provides pricing intelligence and supports a system for trade appraisals, feeding into fuzzy matching for desired vehicles based on local market data. Vauto is expected to roll out "slick AI upgrades" soon. Auto Vision is recognized for its strong used inventory tools, but is noted as missing some specific GM new car features.

Service Drive & Communication Tools: Car-scanning tools such as UVEye (with a reported lease cost of $5,500/month) and TraXtion are used in service drives. UVEye has supported tire sales (requiring strong advisor processes), improved customer perception, and provided protection against lot damage claims. However, achieving ROI on low-profit items like tires and alignments remains a challenge without high volume. Numa is employed for customer communication and beta-testing voice AI for appointment booking.

GM CarBravo Impact: The transition from GM CPO to CarBravo has shown a 34% increase in used sales for one dealer. This is attributed to the ability to certify a broader range of vehicles (including off-brand and high-mileage units) and leverage IMR dollars for used advertising. The program has been adjusted based on dealer feedback, now offering Tier 1 ad support and incentives.

Inventory Conditions & Market Fluctuations: Honda has canceled its 0 Series, reflecting market shifts. Stellantis dealers face new car sales challenges due to the inventory mix, but anticipate improved sales with new 2025 model incentives and the upcoming arrival of Jeep Cherokees, which addresses a significant product void.

Volvo expects inventory to be "front loading" then light until August, though some dealers express skepticism regarding this forecast, given current high day supplies.

Dealers report access to specific high-demand vehicles, including 2026 Wrangler and Gladiator Sport inventory at the lowest possible MSRP, and New F150 Raptor R models selling significantly over MSRP.

Credit Pulling Practices: Credit bureaus are utilized by finance managers for fraud prevention and understanding customer buying habits, with the $7-$8 cost per pull considered valuable for underwriting and compliance. New features in credit reports, such as those from NCClarity, offer valuable insights for lender selection.

However, there is a push to reduce unnecessary credit pulls, advocating for free or integrated soft pulls, and questioning expenses incurred solely to comply with lender policy. RouteOne has introduced a feature to remove the "run all credit bureaus" button.

Wins & Warnings

Pro & Exec members: Your 6 Wins & Warnings are below.

Dealers praise Tekion DMS efficiency gains, GM CarBravo's used sales growth, and AI-assisted website rebuilds slashing costs, while sounding alarms on CarGurus' aggressive pricing and retargeting tactics, Tekion's onboarding friction, and UVEye's challenging ROI at $5,500/month.

Not seeing them? [Upgrade now]