How Consumer AI Is Reshaping the Car-Buying Experience

Devin Daly, co-founder and CEO of Impel, joins Inside Automotive to discuss the evolving landscape of FTC compliance, pricing transparency, and the growing role of AI in automotive retail.

As regulators continue scrutinizing dealership pricing practices, Daly explains why many retailers misunderstood the implications of the FTC's 2025 rule vacatur and how recent warning letters signal that compliance enforcement remains a major focus. He also explores how compliance responsibilities now extend beyond websites and advertising into CRMs, BDC operations, and everyday customer conversations. The discussion highlights how AI can help dealerships maintain consistent messaging, improve disclosure practices, and adapt more quickly to changing market conditions. Daly also shares his perspective on how consumer-facing AI tools are accelerating transparency and reshaping the traditional car-buying process.

Key discussion points:

• Why FTC scrutiny of dealership pricing practices continues to intensify
• How compliance responsibilities have expanded into CRMs and BDC operations
• The role of AI in delivering consistent pricing disclosures and documentation
• Why pricing transparency is becoming a permanent market reality
• Common dealership compliance mistakes involving add-on product disclosures

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Transcript

Welcome And Summit Preview

Announcer 0:06

Welcome to Inside Automotive with Jim Fitzpatrick.

Jim Fitzpatrick 0:12

AI is changing the way dealerships communicate with customers, and it's also reshaping the conversation around pricing transparency, compliance, and digital retailing. Joining us now is Devin Daly, who's the co-founder and CEO of Impel, for a preview of his upcoming panel discussion at the CBT News Auto Leadership Summit on June 16th. His uh his part, his segment, I should say, is titled AI, Digital Retailing, and the Next Frontier of Pricing Transparency. So, Devin, thank you so much for joining us on the show today to discuss this event.

Devin Daly 0:44

Jim, thank you so much for having me and can't couldn't be more excited about the upcoming event on June 16th. Thanks for thanks for including us.

Jim Fitzpatrick 0:50

Sure.

FTC Pressure Returns On Pricing

Jim Fitzpatrick 0:51

So a lot of dealers thought that the FTC's big rule was dead. Is this pressure actually coming off or what's the deal?

Devin Daly 0:59

Right, no, I think the industry uh exhaled a big sigh of relief in January 2025 when the FTC rule was vacated by the Fifth Circuit. Um, but obviously, more recently in March 2026, the FTC sent warning letters, as we've all heard about, to the 97 dealer groups nationwide, telling them that advertised prices must include the total price. So I think it's safe to say that uh no, this has you know not been exhausted or the pressure is not off. And just recently, earlier this week, Cox Automotive even paused their pricing badges, right? So um the good or great price badges that were on listings were paused in June of 2026. Uh, a sign that even folks that focus on pricing or vehicle data are reevaluating how they present prices. So I think punchline, uh, this is an industry-wide shift. It is not over, and it's not just a dealership problem.

Jim Fitzpatrick 1:52

Yeah, there's no question about it. And I think even other some other third-party lead providers have uh followed

Pricing Talks Start Before Showroom

Jim Fitzpatrick 1:57

suit. So the panel title uh talks about engaging customers before they walk in the door. What's actually changed there?

Devin Daly 2:05

Yeah, I mean, I think first of all, uh a lot of folks are negotiating price long before they enter the showroom, right? I mean, we've even heard the stories about consumers that are using AI agents to even negotiate the deal and really try to fully negotiate that deal. So look, I think the punchline is the first pricing interaction is rarely on the lot anymore. It's a digital response to a lead, it's uh an online web chat. The part that most dealers miss, everyone knows that you have to advertise an FTC compliant price. What many may not realize is even in a sales conversation, that can constitute where a rep is communicating, that can constitute an advertising or pricing disclosure. So the compliance conversation has moved out of just the marketing department and the website and the ad copy and into the CRM and the BDC. And again, that's where AI obviously can really help ensure compliance uh with the FTC pricing guidelines.

Jim Fitzpatrick 3:02

Yeah,

AI Compliance Done Right

Jim Fitzpatrick 3:03

absolutely. Does AI, from your perspective, make this uh the this compliance problem better or worse?

Devin Daly 3:09

It's a great question. You know, it's kind of a bowl of hand, right? But I think AI, if used properly, the operative word there is if, um, you know, an enterprise-grade AI platform can absolutely help with compliance, right? I think it is difficult to trust a rep to navigate the ever-changing world of your pricing strategy and FTC compliance. AI, though, if configured properly, which is something you know we counsel dealers on, and dealers are able to, you know, sort of inform and structure the AI in the way that they would like, can absolutely help drive better compliance. There's there's no doubt about that. Yeah. The other sorry, just one last comment on that, Jim. I would just say the other benefit is AI is number one consistent, obviously, but also reviewable. Every conversation with an AI platform creates a record. And, you know, with AI in this FTC regulatory environment, that's a feature, not a risk. And so if a regulator or auditor says, show me, you've got that AI record there to protect yourself.

Gen AI Accelerates Transparency

Jim Fitzpatrick 4:10

That's right. That's right. Isn't transparency just a cost that dealers are gonna have to eat at the end of the day?

Devin Daly 4:16

Look, I mean, I think we were heading towards a world of complete and utter price transparency prior to Gen AI. And I think, you know, the release of these generative AI models have unlocked a new era of transparency where, you know, trying to maintain information asymmetry is likely a fool's errand, right? As we all know, the big unlock of Gen AI is that it is trained, and and really that the fundamental or the foundation of it is the ability to crawl the entirety of the world wide web. And so consumers now have at their fingertips all of the pricing available anywhere. And so, yes, I mean it is our our firm belief that it is better now to embrace pricing transparency and information symmetry.

Jim Fitzpatrick 4:58

Yeah, having said that, and having said that the internet's already made buyers smarter, um, what's what's actually left to change?

Devin Daly 5:06

Yeah, look, I mean, I think again, the the business was historically built on information asymmetry, and you know, uh the dealer knew the real cost, the value of the trade, which fees were soft or not, and that gap was the original source of distrust in car buying. And you know, again, now we believe two forces are closing it at once. You've got regulation from the FTC, uh, which is essentially an asymmetry reduction project because all in pricing and advertise equals paid exist to put the consumer and the dealer on equal footing. And then again, the consumer now has AI in their own pocket, in many cases, even informing how they negotiate and uh and engage with that dealership and negotiate with that store.

Add-Ons Disclosures And F&I Impact

Jim Fitzpatrick 5:47

Sure. One more thing that dealers have got to focus on. Where do dealers most often trip up?

Devin Daly 5:53

You know, I think uh getting the disclosures right, especially on add-on products. And so, you know, that's another, I think, benefit of AI, right, is being able to have that disclosure early on inside the AI system, not just on a paper form at signing, which is fraught with potential issues. Um, we believe doing that ahead of time can help you get ahead. And having you know built-in control layers, guardrails, repositories, which your management level set and control but are designed to help the AI deliver compliant disclosures consistently with every consumer in every conversation. And I think about that not just as a compliance risk mitigation tactic, but if you use AI to disclose and discuss F and I or add-on products earlier, you can also warm consumers up before they get tossed in the F and I box, which we all know can help FI and PVR attachment rates.

Jim Fitzpatrick 6:43

That's

AI Helps Dealers Pivot Fast

Jim Fitzpatrick 6:44

right, that's right. This is uh famously cyclical business for sure. How does AI fit uh a market that's always swinging?

Devin Daly 6:53

Yeah, to your point, right? Auto is notoriously cyclical, you know, new versus used versus fixed, but also things like terror, I mean COVID, inventory shortage, then tariffs, gas prices with Iran, interest rates, which today the markets are dropping because they think interest rates are gonna be high. And more recently now, things with the FTC. And so it seems like nearly every month we are pivoting tact or strategy. And it is nearly, if not totally, impossible to train human staff in pivot direction every month, right? If you think about tariffs and trying to train your team to articulately and easily explain to a consumer this is a pre-tariff vehicle versus a post-tariff vehicle, or our vehicles are mostly assembled in the U.S. And so this is the impact of tariffs. Again, with the changing tariff policy, you'd have to train and retrain and check in, and that can be a six-week process. By the time we're done, it's like painting the Golden Gate Bridge. The policies change or the strategies change. AI allows you to scale up and down seamlessly, change your strategy from a primarily, you know, variable-driven strategy to fixed or you know, new versus used, and all throughout all of those changes, ensure that you're doing all of that in a compliant way.

Jim Fitzpatrick 8:10

That's right, that's right. And through companies like yours, dealers will make it through. I mean, this is just one of just one more thing that they, you know, today's dealers got to deal with, but we'll make it. You know, we are a resilient group out there, and uh you're helping dealers figure all of that out.

Register For The Leadership Summit

Jim Fitzpatrick 8:26

So, folks, you're gonna see Devin Daly at uh the conference, uh, which we're so excited about. It's the CBT News uh auto leadership summit on June 16th uh at the Salamander Hotel. If you haven't registered, please do so. This is a conference you definitely want to attend. It's almost a must-attend, right, Devin? I mean, with all that's going on, you don't want the FTC knocking on your door going, uh, can we talk to you for a minute? And that conversation could cost you millions in fines if you're not doing it right. And uh and Devin's got his hand on the pulse of what's going on there. So thank you so much, Devin, for joining us on the show. Look forward to seeing you in just a couple of weeks.

Devin Daly 9:01

Absolutely. Thanks for having me, and couldn't look forward to it more. Thank you.

Jim Fitzpatrick 9:04

Thanks.