17+ Years of
Tariffs are eating margin, affordability is tightening, and the DMS alone was never built to handle modern customer expectations. This guide lays out how dealers and automotive leaders are rewiring around a unified customer view so CX becomes a retention engine, not a cost center.
What This Guide Covers
Every dealer principal and GM is running the same math this year. Tariffs have added more than $35 billion in cumulative cost to the industry since 2025. Automakers have absorbed most of that, with dealers absorbing another 4.5 percent of the price increases, and consumers picking up the rest. The average suggested retail is up 10.4 percent. Imported vehicles are running $5,000 to $8,900 higher per unit. Monthly payments are near record highs, and nearly one in five buyers are now carrying a payment over $1,000.
At the same time, days supply is polarizing. Toyota and Honda are sitting near 24 to 28 days. Volvo is at 93. EV inventory is aging at most rooftops, and 300,000 EVs are coming back from lease in 2026, up more than 200 percent from last year. Industry forecasts are pointing to roughly a 12 percent drop in dealership profits this year, even with steady sales. The 2024 CDK outage exposed the other half of the problem: when the DMS goes down, the store goes down. Fifteen thousand dealers ran on spreadsheets and sticky notes for weeks. New car sales fell 50 percent at affected stores that month.
The dealers pulling ahead are not waiting on the next DMS release. They are building a layer on top of it. A unified customer view across sales, service, parts, and F&I that holds together when the DMS is up, when it is down, and when the customer expects a text response at 9pm on a Sunday. Microsoft Dynamics 365 is where that layer gets built, because it already integrates with the productivity and AI tools your people use every day.
A DMS was built to process transactions. It tracks the sale, the service work, the parts issued, the F&I product. What it was never designed to do is carry the relationship across every touch a customer has with your rooftop or your group. That is why dealers end up with a CRM that a handful of BDC agents use, a service scheduler that doesn't talk to sales, a marketing platform that can't see open RO history, and an F&I system that doesn't know whether the customer already declined the warranty conversation last week.
The cost of that fragmentation used to be mostly inconvenience. In 2026, with profit forecast to drop 12 percent, retention math has changed. Service absorption is the margin lever. Conversational AI can handle 60 to 80 percent of inbound service calls and texts when it is pointed at real customer data, lifting absorption 15 to 25 percent. Only about 25 percent of dealers are using AI in fixed ops today. The early adopters are quietly pulling away.
Generic AI use case lists miss the point for dealers. These are the patterns producing measurable returns for dealer groups, franchise stores, and automotive groups that have moved past the pilot stage. Each one is grounded in a process already running, already painful, and already measured.
Leads from the OEM, third-party sites, walk-ins, and service drive all land in one record. Dynamics 365 Sales plus Copilot for Sales drafts the first response, logs the interaction, and surfaces the customer's full history across the rooftop or group. Same lead, fewer dropped conversations, faster speed-to-lead.
Service is 48 to 59 percent of gross at the major groups and the one segment posting steady growth. Dynamics 365 Customer Service plus Copilot for Service handles scheduling, status updates, and post-visit follow-up, grounded in the DMS plus the customer's history. Conversational AI handles 60 to 80 percent of inbound calls and texts after hours without adding headcount.
With national days supply at 62 and EV inventory aging fast, pricing and trade decisions need to be made daily, not weekly. Power BI on unified inventory, F&I, and market data gives the used car manager and GM the same view at 8am. Aged unit exposure stops being a month-end surprise.
Customer Insights unifies DMS, CRM, service, and marketing data into a household view. Lease maturity, service interval, warranty expiration, and F&I product gaps all become triggers. With 300,000 EV leases returning in 2026, the rooftop that sees maturity 90 days out wins the conversation.
F&I now produces 40 to 45 percent of gross profit at $1,800 to $2,200 per vehicle retailed. A Copilot Studio agent can pre-fill deal jackets, surface product eligibility, and flag compliance documentation gaps before the customer sits down. Every consequential decision still stays with the F&I manager, documented in the system of record.
For dealer groups running their own parts distribution, and for aftermarket and supplier partners, Power Automate and AI Builder handle the work between systems: vendor onboarding, tariff code verification, allocation exceptions, warranty claim submission. The same data layer that powers retail CX also powers the back office.
Any tech investment in 2026 has to answer a blunt question: what does this do to the P&L. Independent Forrester Total Economic Impact studies commissioned by Microsoft put defensible numbers on the return, and automotive-specific benchmarks translate them into dealer terms.
Forrester's TEI found 116 percent ROI over three years and $19.7M NPV for a composite 25,000-employee enterprise, with employees saving an average of 9 hours per month on drafting, summarizing, and research. At a dealer group, those hours show up in BDC, service, and office operations.
Service and parts now produce 48 to 59 percent of total gross profit at the six largest public dealer groups, compared to 30 to 35 percent for new vehicle sales. Retention and digital service experience are no longer nice-to-have, they are the margin strategy.
Forrester's 2026 TEI projects more than 200 percent ROI over three years with payback around six months for mid-sized organizations. That makes it a practical anchor for dealer groups consolidating accounting and back-office across rooftops.
Average monthly payments are near record highs and nearly 20 percent of buyers are carrying payments over $1,000. Tariffs added $35+ billion in industry cost. The rooftops winning in 2026 are the ones treating every service visit and every F&I conversation as a retention opportunity. TrellisPoint's AI Value Engine translates those patterns into numbers that apply to your group.
Every stalled AI pilot we see in automotive traces back to the same root cause. The model is fine. The vendor is fine. The intent is fine. The data underneath is not. Duplicate customer records across the DMS, CRM, and service platform. Households that look like three separate buyers because the data was never reconciled. F&I product history that lives in one system and never hits the CRM. Lead sources that get rewritten every time the DMS integration runs. AI amplifies whatever it is pointed at, and pointing it at fragmented dealership data produces wrong answers faster than anyone can recover from.
The groups making real progress in 2026 are not trying to modernize every layer at once, and they are not buying every shiny thing on the NADA show floor. They sequence the work so each phase funds and de-risks the next one. Here is the pattern we see succeed at rooftops, dealer groups, and automotive organizations.
Stand up Dynamics 365 as the single system of engagement across sales, service, and BDC. Reconcile against the DMS. Retire the shadow spreadsheets. Get every customer-facing person on the same account and household view.
Feed DMS, service, F&I, and marketing data into a unified profile through Customer Insights and Microsoft Fabric. This is where cross-system questions stop requiring a call to the DMS rep, and where the AI starts having something real to work with.
Use Power Platform to automate the handoffs currently running on email and sticky notes: service follow-up, lease maturity, warranty claims, deal jacket prep, compliance routing. See our Power Platform implementation service.
With the first three layers in place, AI has the data and governance it needs. Start with one high-volume, high-friction process such as service BDC or lease maturity outreach, measure the lift, document the controls, and scale from a working foundation. See our Microsoft AI practice.
Most CRM partners know the platform. Most AI partners know the models. Very few understand what it takes to run a rooftop or a dealer group where the DMS, OEM programs, F&I compliance, and customer expectations all collide in the same day. TrellisPoint works at that intersection, with the Microsoft Solutions Partner designation, deep Dynamics 365 experience, and a methodology built to make technology investments defensible to the GM, the CFO, and the dealer principal.
Figures and framing in this guide draw from the following public research and reporting.
Schedule a conversation with our team to map your current stack, identify the fastest wins in service, retention, and BDC, and put a data foundation in place before you scale AI. No pitch. No generic demo. A real conversation about where your group stands and what it takes to move forward.
