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Dealer set up CarPlay to iPhone. When plugged in, routes always start from dealer location. When phone not plugged in, Maps works perfectly. CarPlay does not show current location on screen, and always jumps to dealer location. Sometimes works, sometimes not
 

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Sounds like an issue with your phone. There is nothing to set up CarPlay for iPhone. Just plug it in and it works. Did you set a home location for your iPhone (in the maps app)?
May be dealership added their location as a favorite. In that case simply delete it.

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Dealer set up CarPlay to iPhone. When plugged in, routes always start from dealer location. When phone not plugged in, Maps works perfectly. CarPlay does not show current location on screen, and always jumps to dealer location. Sometimes works, sometimes not
I had the same problem when I moved from NJ. My old home address kept coming up whenever I plugged in my phone. It was frustrating for sure! The solution for me was to drive with the phone plugged in, showing my wrong location until about 10-15 minutes later when the correct location was being shown. I had to do this twice before it completely stopped happening. Good luck!
 

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I thought the iOS was pretty slick with identifying GPS and route patterns. It automatically figured out my home and work address without me adding anything.


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Suggestion since I had a strange similar issue:

This was first vehicle I had with Car Play and did not fully understand it. When I got into my Pachy and plugged in my iPhone 8, the maps would load and always try to go to my old work and not my new work automatically as it's destination. It ends up I had to change my Apple Contacts to my new work's address, as well as set it as my workplace too in the maps app.(Waze too). Finally after all that, after a few days Apple Maps would route to the correct place.

Perhaps check to see if the dealer reset their address as your "home"?
 
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