Capital One Deploys Agentic AI to Support Stressed Auto Dealers (and Finance More Cars)
Auto dealers, pressed by tight industry economics, needed tools to maximize successful sales leads without adding head count. Enter Capital One, home of Auto Navigator, and its new agentic AI 'Chat Concierge' to close the deals.
By Steve Cocheo, Senior Executive Editor at The Financial Brand
For many consumers, buying a vehicle represents one of their largest purchases, second only to a home, and one that is increasingly expensive. Even with the multitude of data available on the web, auto shopping generates a ton of questions for dealerships, from queries on models and features to advice on trade-ins to financing. This comes at a time when dealers’ post-pandemic business models are flipping traditional practices on their heads, tightening budgets just when more trained bodies to answer those questions would be in order.
Sanjiv Yajnik, Capital One president of financial services, says the bank’s automotive technology team has just introduced a digital tool called "Chat Concierge" that can help dealerships cope. This is the same shop that developed Capital One Auto Navigator, which helps consumers find vehicles they want and finance them in cooperation with participating dealerships.
The new tool, which dealers can use by subscription, uses multi-agentic artificial intelligence to answer consumer questions. Recognizing the wide range of questions consumers have, Capital One technologists designed a system in which a master agentic AI coordinates the work of multiple specialized agentic AIs.
Often a consumer’s call to a dealership doesn’t go sequentially. One moment they may be asking about this, then about that, then trying to set up an appointment or a test drive.
"So the agents have to talk to each other and one agent is choreographing all the other agents," explains Yajnik. "It’s not a sequential process."
Yajnik says Chat Concierge is designed to mimic human reasoning. The technology enables vehicle comparisons, recommendations and allows exploration of financing options.
Consumers have come to expect convenience around the clock, Yajnik says. "Even at two o’clock in the morning, the customer wants to have a full conversation. It’s not just leaving a name and number for someone to call back in the morning." He says Chat Concierge can provide the equivalent of human interaction and serve up most of the answers people are looking for.
Carrying on such conversations, via text-like messaging and other interactions, requires more specialized training than an ordinary chatbot can provide, according to Yajnik. The team tackled this rapidly evolving technology.
He adds that developers went into the project knowing what has not changed about the car buying process as well.
Read more: Inside Capital One’s Auto Lending Innovation Machine
Why Agentic AI Now? Dealers Can’t Afford More Bodies to Answer Queries
Yajnik has headed Capital One’s auto finance operation, based in Plano, Texas, for about 17 years. Among the largest U.S. auto lenders, the company has close relationships with 15,000 dealers, and "deep relationships" with two thirds of those, according to Yajnik.
So, he knows the business intimately, and he says it is going through a significant series of changes.
The price of cars has soared, creating affordability challenges for buyers. Yajnik points to the ubiquitous Toyota Camry as an example. The average monthly payment on a used Camry rose 32% between 2019-2024. This price trend has driven sales down 7% over the same period.
Here’s the rub: "At the same time that sales were going down, supply chains were opening up," says Yajnik. "And so the inventory on dealers’ lots has been growing, which puts pressure on them."
Yajnik says in 2022 U.S. dealers had 49 days of supply in hand. By 2024, this had risen to 85 days of supply.
Overall, he adds, this has meant shrinking margins on sales. From 2023 to 2024, the gross profit on new vehicle sales fell by 33%. On used vehicles, dealers saw a 23% decrease in gross profit.
Falling margins plus falling sales combine into a squeeze.
"So, dealers have to do two critical things: They’ve got to run very efficient operations and they’ve got to make sure every single sales lead they can get becomes engaged with the dealership and comes to the store," says Yajnik.
The Human Element Remains a Key Part of Auto Buying
Getting prospects in the dealership door is critical, Yajnik says, even if they discover possible purchases on the dealer’s own website. That’s because, in spite of digital marketplaces that can even deliver a vehicle right to your doorstep, most Americans will shop digitally but still crave the human element at two key moments. Yajnik says that even when people claim that they’d like an all-digital purchase process, when it comes to it, they go hybrid.
The first is that people want to be able to test drive their pick of car or truck. This isn’t just a matter of practicality, says Yajnik, but also emotion. Buying a car is often exciting, both in the anticipation and the final purchase.
"During Covid, one of the most telling things was how people didn’t go into dealerships in the first couple of months because they were so scared," Yajnik recalls. "But even before the vaccines came out, within a few months, people started coming back to dealers to test drive cars." And many prefer to drive their purchase off the lot.
In fact, a consumer survey released in January by Cox Automotive found that 60% of the sample said they would purchase a vehicle without a test drive if given a specified time period in which they could make unconditional returns. Here’s the catch: The question asked was how the respondents thought they would feel 10 years from now — meaning that even then, 40% wouldn’t go that way.
But the other key point from Yajnik is that many consumers won’t pull the trigger on a purchase remotely.
"They want to be able to sit down with a person at the dealership, look them in the eye, and negotiate," he explains. "They don’t want to do all that online."
Read more: As Banks Embrace AI, Soft Skills Matter More Than Ever
Turning More Contacts into Qualified Leads that Come to the Dealership
Dealers have been using basic chatbot products for some time, Yajnik continues, but typically these pose some elementary screening questions and then take contact information for a human callback. The growing application of generative artificial intelligence to financial services suggested to Capital One that the technology could do more than take messages.
"The car buying process is very complex," says Yajnik. General purpose GenAI wasn’t up to the jobs involved. Yajnik wanted to develop AI that would not only carry out the tasks discussed earlier, but make an appointment for the prospect to come in for the test drive. The process also had to be "low latency," says Yajnik, because shoppers weren’t going to wait around while everything happened.
Capital One settled on a custom-trained effort incorporating both GenAI and agentic AI.
"You need a tremendous amount of data to train these things," says Yajnik. "Data is like fuel to GenAI. The more you have, the better it is going to operate. But you can’t just throw generic data into it, nor data that hasn’t been properly cleaned."
Given Capital One’s long and dominant history in auto financing and its maintenance of the Auto Navigator product, the bank had a deep pool of data for this purpose. In addition, he explains, dealer-level data is incorporated into processes as well, enabling it to become expert in customizing Chat Concierge at the dealership level. These streams fed into development and will continue to inform evolution of the technology. (Yajnik notes that dealer-level data is anonymized for privacy’s sake.)
Shoppers first encounter Chat Concierge on dealers’ websites. Yajnik says the bank’s existing dealer salesforce is hooking up dealerships that subscribe to the service.
A key attraction for dealers is that this AI approach enables many more prospects to be served than a dealership could possibly afford.
"In the old days," says Yajnik, "the dealership would want to get people off the phone pretty quickly in order to grab the next call. Chat Concierge allows the customer to keep talking, allowing the dealership to get more and more information. You don’t have to be worried about missing out on someone."
Even as Chat Concierge rolls out, Yajnik says the bank is working on future enhancements. In the offing will be features that will enable dealerships to present consumers who want an all-digital experience, with a vehicle delivery option.
Personally, he says, "I think dealers are here to stay."
