Artificial Intelligence (AI) can offer significant benefits to auto dealerships by improving efficiency, customer experience, and profitability. Dealerships can utilize a large language model AI system and/or through a vendor offering AI-enabled capabilities. Dealers should deploy AI thoughtfully, with proper oversight, and with careful evaluation of the risks inherent in their use. This document describes a governance framework and compliance principles for deploying AI.

Governance Framework

Dealerships should establish a governance framework for deploying AI. A framework should establish policies, processes, and oversight mechanisms to ensure AI systems are deployed responsibly and compliantly.

Dealerships should establish policies for:

• Where AI is used: what business functions a dealership is using AI for, such as sales, marketing, or service.
• How AI is being used: what systems and processes a dealership will use AI to automate, enhance, or replace business functions, and what information the AI system needs access to.
• What personnel are using AI: what personnel in the dealership have access to AI tools for corporate use.

Prior to deployment, dealerships should review the legal and compliance risks of using AI, as well as establish a process for ongoing audits and re-evaluation of AI usage. The dealership should also have a mechanism to immediately terminate AI usage if it violates legal or compliance obligations.

Compliance Principles

Once a governance framework is established to implement AI at a dealership, dealers should deploy AI consistent with these five principles:

• Transparency: Dealerships should clearly inform customers when they are interacting with AI or when AI is used to support a decision that affects their experience. Such disclosures should be timely, easy to understand, and designed to help customers know when human assistance is available.
• Fairness: Dealerships should evaluate AI systems to help ensure that their outputs do not result in unfair or inconsistent treatment of customers. This includes monitoring for biased patterns in recommendations, pricing, screening, or communications.
• Privacy: Dealerships should use AI in a manner that protects customer, employee, and business information and aligns with sound data governance practices. They should understand what data an AI tool collects, how that data is used and stored, and whether appropriate safeguards are in place to prevent unauthorized access or disclosure.
• Accountability: Dealerships should assign clear responsibility for the selection, deployment, and oversight of AI tools used in their operations. Personnel responsible for these systems should monitor performance, address identified issues, and ensure that appropriate governance, documentation, and review processes are in place.
• Accuracy: Dealerships should take reasonable steps to ensure that AI systems generate accurate, reliable, and current outputs for their intended use. This includes validating results, monitoring errors or hallucinations, and maintaining processes for correcting inaccurate information.