Artificial Intelligence Is Being Used To Make Buying a Car Better

We have all been served up suggested digital posts and advertisements. Google "best carry-on luggage" and you'll have brands like Monos, Solgaard and Away in your Instagram feed in minutes. Suggest to your husband that you should start researching new sofas in a conversation over dinner and Wayfair, Pottery Barn and Crate & Barrel pop-up ads are suddenly all you see online.

The way you are served these posts is changing thanks to artificial intelligence (AI), which is allowing more personalized targeting for advertisers and potential customers.

The automotive industry is utilizing AI at all levels, from suppliers to automakers to car dealers. Cognizant, a technology company, is working with the industry to transform the way it does business, using AI.

Aditya Pathak, vice president and head of automotive, transportation and logistics at Cognizant, told Newsweek that the company takes an all-encompassing approach to brand interactions, from identifiability to the shopping experience, when they work with clients. "There is a dealership experience, there is a pre-dealership experience, there is a post-dealership experience, and all of these come together to really shape what a brand perception looks like for an automaker," he said.

In the U.S., in-market shoppers are primarily served through their dealerships. Automaker websites are designed to funnel potential buyers to those dealers. It is then up to the dealership to complete the sale. Generative AI (GenAI) allows that process to adapt to consumer behavior more than before, while giving automakers and dealers a better chance of closing a deal.

It takes 15 critical hours to make a decision

Consumers spend, on average, 15 hours researching, test driving and completing the sale of a new vehicle, Pathak said. About 60 percent of that process is completed online. AI is helping companies build brand and vehicle awareness early in that process.

"If you're a brand owner, your job and your focus is really to make sure that your brand gets considered. Now, what that means is that the brands are looking to identify who are the real consumers at this point of time. [They are] demonstrating high propensity to buy. Being able to accurately identify them, through their search patterns, through their comparisons to the websites they're visiting... What are they trying to look up and what are they trying to research," Pathak said.

He explained that AI has a "critical role" during those 15 hours, aiming to make them "easier and seamless" for all parties involved.

"So far, personalization of customer campaigns in the automotive industry has been limited by static algorithm based segmentation on a limited dataset, and the complexity of managing engagement for each segment. GenAI unleashes an entirely new era of micro-personalization. It is now possible to use thousands of different data-points about the customer to micro-personalize content, images and videos in multiple languages at an individual level, by leveraging real-time insights into the buyer behavior on the brand website, search engines, social media and customer profile information already with the automakers. This level of micro-personalization extends into the recommendations to tailor the car's features and accessories, as well as financial offers and incentives that can maximize the customer's chances of purchase," Pathak said.

That plays into how customers are served advertisements. With AI doing the heavy lifting, automakers and dealerships are able to tailor ads to match search terms and viewing patterns of potential new vehicle buyers.

For example, if you live in the Rust Belt and are researching family SUVs, you're more likely to be served up ads for all-wheel drive models. If your zip code has a high number of Nissans, a Nissan with all-wheel drive may appear more frequently in your social media feed, with information about the dealership in your area.

Traditional approach to selling a car is dead

Gone are the days of the salesperson-first approach to dealerships. Using technology, dealers are able to connect with potential customers online and when they visit a dealer, they are able to use self-service kiosks and displays to explore a vehicle without a salesperson hounding them.

"If you look at what the buyers hate the most about the buying experience, it's really interacting with the salesperson in the dealership. So now, you are actually able to ease off that interaction and really enable the buyers to search and explore for themselves," Pathak said.

Customers can explore vehicle options for themselves using large format displays and kiosks. They can get answers about features and performance from them too, and even comparison shop. In turn, data about what customers are looking at, exploring, and asking about can be used to better inform automaker and dealer decisions.

When the customer is ready to buy, dealerships will be able to make an offer that is more specific to the potential buyer's desires based on AI-gathered data.

Protection for consumers

Some protections are built in for consumers. "Typically, all of these things are not like personally identifiable data, but they are uniquely identifiable, not at an individual level, but at a cohort level," Pathak said.

Marketers are able to know where you are browsing from and your internet service provider. A dealership could get notifications that customers in their area are looking at certain vehicle attributes, and can adjust marketing campaigns and stock accordingly.

"They are able to identify groups, but they're not able to identify individuals at an individual level, unless and until you are consenting," he said. For example, if a person is signed into a website where you have created an account, then they are identifiable to an extent, depending on that website's terms and conditions.