TL;DR: AI offers immediate efficiency for car dealers, but unregulated use creates significant legal and reputational liabilities. To protect your brand, you must prioritize "verified efficiency" over raw speed.
At IMAGIN.studio, we see the transformative potential of AI every day. However, I’ve noticed a concerning trend in our industry: a rush toward automation that ignores the underlying risks of intellectual property (IP) theft, data inaccuracies, and social bias.
If you are using AI to generate vehicle descriptions, customer emails, or marketing imagery, you are likely gaining speed—but you might be inheriting a legal minefield.
The state of AI risk: a CEO’s overview
The following table summarizes the trade-offs I believe every automotive leader must evaluate before scaling AI tools.
The IP minefield: why your content might not be yours
AI models trained on scraped data create direct legal exposure for the dealerships that use them. Many popular AI tools were built by scraping the internet without the creators' consent. This isn't just a theoretical problem; it is an active legal battle.
I am closely following the Stability AI vs. Getty Images case in London. Getty alleges that millions of their images were used without permission. Similarly, the New York Times is suing OpenAI.
My Take: If the courts rule against these AI giants, the businesses using that generated content—including auto retailers—could find themselves on the wrong side of copyright law. At IMAGIN.studio, we advocate for using content from providers who can prove their training data is copyright-safe.
Why "Hallucinations" are a dealbreaker in auto sales
AI-generated misinformation, or "hallucinations," can instantly destroy a customer's trust. Because AI models predict the next likely word rather than understanding facts, they can invent vehicle features or history that simply don't exist.
We saw a clear warning of this when a journalist for the Chicago Sun-Times published a summer reading list where AI had entirely invented the book titles. In our world, an AI "hallucinating" a trim level or a financing rate isn't just a typo - it’s a potential breach of consumer protection laws.
The Insight: The time your team saves by using AI is often lost when they have to spend hours correcting errors. Reliability must always come before automation.
Eliminating algorithmic bias
AI can unknowingly replicate human biases, leading to reputational damage. If an AI model is trained on biased data, its outputs may unintentionally alienate specific customer segments. For an industry that relies on expanding its reach, using biased technology is a significant strategic failure.
My strategy for responsible AI adoption
I believe the path forward for automotive retailers, car dealers, and finance companies requires a shift from "speed at all costs" to "verified efficiency." Here are the three actions I recommend to my partners:
- Verify every output: Never publish AI-generated listings or images without a human review. The "Human-in-the-loop" model is the only way to safeguard your brand.
- Audit your sources: Ask your tech providers: "Where did your AI get its training data?" If they can’t give you a clear answer, you are holding the risk.
- Partner with specialists: Work with industry-specific providers who deliver copyright-safe content. Specialized tools are built with the nuance of the automotive industry in mind, reducing the chance of error.
Key takeaways
- Speed is a trap if it comes at the expense of legal safety and data accuracy.
- Legal precedents currently being set in the UK and US will dictate how dealerships can use AI in the future.
- Human oversight remains the most important component of your AI strategy.
Reputation is harder to build than efficiency. Protect yours by auditing your AI tools today.
