Virtually every auto dealer knows data is a powerful tool for their business.

They’re just not quite sure how to use it.

That’s perhaps the biggest takeaway from Cox Automotive’s 2024 Power of Data study, released this week. The surveys of 393 franchise dealers and 191 dealership managers found a large majority of dealers — 83% — use a vendor dashboard or reporting tool that provides data analysis, but less than a third of them said they’re satisfied with the insights they get from third-party vendors and just 26% said they’re confident in those insights.

Among of the issues reported by dealers in the survey were timeliness and inconsistency, with 54% of the respondents saying they’ve experienced conflicting data across multiple sources, making it difficult to determine which is accurate, and 70% saying the lag in “real-time” customer/lead and vehicle data makes data-driven insights less useful, leaving dealers struggling to figure out which data is “correct” and which is “estimated.”

“That diminishes dealers’ confidence and often means they are less likely to use data effectively and may miss opportunities to improve efficiency and the overall customer experience,” Cox Automotive vice president of sales Chase Abbott said in a news release. “However, with challenge comes opportunity, and an omnichannel approach proves to be the best strategy dealers can take to truly capitalize on the power of data.”

Other issues include data security. The study showed 59% of dealerships were concerned about ensuring data privacy and compliance when adopting new data tools, and 44% were worried enough about those areas that they’ve actually backed off from adding some new tools.

Despite the concerns, 94% of the dealers surveyed said they use dealership data and customer/lead data in their operations, and 94% use vehicle data. And, Cox said, the study shows dealers using their data the most are getting the most positive impact on their business results.

In a news release, Cox said it identified some best practices from qualitative feedback gathered from dealers who use data extensively, including:

  • Combating data lag by implementing tools that update in real time and keep every department — marketing, sales, fixed ops and the back office — “in sync” with shoppers.
  • Using artificial intelligence-powered automation to determine the data that should drive action. Predictive insights can help overcome third-party data quality concerns.
  • An audit of vendors can help dealership staff prioritize which shoppers to follow up with next. The audit should include how many shoppers are covered by the data set, how frequently data is updated and how quickly it gets translated into insights in dealership systems.

“As dealers explore using data for their current and future needs, AI has proven to and will continue to have a profound impact on dealer and buyer connections,” Abbott said. “AI can pull data and insights together to provide a new level of intelligence and analytics the industry hasn’t seen before.

“Data is worth doing right. With high quality, accurate and secure data delivered in real time, dealers can unlock powerful insights that improve customer satisfaction, employee satisfaction and profits.”

The study’s results are available here, and Cox Automotive’s eBook, featuring a detailed look into the use of data and insights, can be downloaded here.