Reprinted from CBTnews.com
Walking the floor at NADA 2025, one thing became immediately clear: digitization is not just a topic of conversation; it is the conversation. From insurance verification to dealership management systems (DMS), vehicle scanning, and auctions, every booth—without exception—was showcasing its digital transformation. The industry is not just embracing technology; it is being reshaped by it.
This shift should not surprise anyone. We live in a world where digital convenience reigns supreme, from how we shop to how we consume entertainment. The auto industry is following suit, replacing outdated, manual processes with streamlined, efficient digital solutions. And once this shift begins, there is no turning back. Just as we are inseparable from our smartphones, the 500+ booths at NADA proved that the automotive industry is now inextricably linked to the digital world.
One of the most noticeable trends at NADA 2025 was the tech-driven revolution of car buying at dealerships. Previously, vehicle inspections depended on subjective human judgment. Now, AI-powered scanning instantly assesses a car’s condition and provides real-time pricing insights. Soon, these systems will go even further, enabling the immediate transfer of ownership of the vehicle and even facilitating payments for customer trade-ins. These advancements eliminate the traditional bottlenecks that slow down the buying process. If time is money, such streamlining creates immense value for both buyers and sellers.
Auctions are another critical piece of the puzzle. As dealers establish buying centers and shift how they purchase directly from consumers, they are also transforming how they acquire inventory at auctions as well. The process has gone digital, replacing in-person inspections with online assessments that allow dealers to confidently evaluate vehicles remotely and place bids. This shift has become the industry standard for the fastest-evolving dealers, streamlining acquisitions and expanding access to inventory. These digital advancements enable large national dealership networks to increase their ability to quickly meet consumer demands. They also allow small dealership groups to expand their reach without adding to their physical footprint by buying and inspecting a vehicle remotely, transferring the title into their name, and then immediately posting that vehicle for sale online before it leaves its current location.
Do digital solutions really boost profits beyond what a human-driven process can achieve? Absolutely. A fully digital workflow enhances profitability by streamlining operations and eliminating hidden costs, potentially increasing profits by 20%. While results vary, the principle is constant: eliminating inefficiencies drives financial gains.
Efficient dealers face less drag on operational expenses and pay less operational tax or what I call “time tax”—the financial burden of wasted time and lost potential from manual processes. Even perfectly executed manual tasks, like data verification or paper processing, encounter delays with mailing, printing, waiting in line, or couriering documents. These issues lead to additional floor plan expenses, as unsold cars increase interest payments, or tie up cash longer if the vehicle is not floor planned. Ultimately, operational inefficiencies increase the cost of doing business—a connection many dealer principles miss as those costs have been buried on P&Ls and previously tough to combat. That is no longer the case in the digital world.
Further, this all connects to the evolution of your DMS. It is no longer just a historical record of customer interactions; it is the launchpad for the digital solutions showcased at NADA. The DMS provides the data necessary to automate processes and reduce operational and paper-based expenses—hidden costs your CFO may not even know.
Consider the cost of a vehicle sitting on your lot for even one extra day. It is not just the floorplan loan; it is the lost opportunity cost of that space. Paper-based transactions can lead to poor customer experiences, costing you repeat business. Human error in reconditioning, like missing an undercarriage issue, can significantly impact resale value. Finally, consider the often-overlooked costs of mailing, paper, storage, and physical handling. These expenses, often buried in a dealership’s P&L, add up. Eliminating them can unlock significant profit gains—that 20% we have been discussing.
If you braved the snow for NADA, do not dismiss the digital solutions on the show as mere novelties. They offer real opportunities to cut costs and boost profitability. Outdated processes erode margins. Digital-first dealers eliminate these inefficiencies, turning vehicles faster, reducing carrying costs, and improving customer experience. The result: a more profitable dealership.
Forward-thinking dealers already grasp this. Digital transformation is not about shiny new software; it is about leaner, more profitable operations. Those who embrace it now will lead the next era of automotive retail, while those who lag risk being left behind.
