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‘MONTHS TO CORRECT, IF NOT YEARS’: CAR DEALERSHIPS AND CUSTOMERS FEEL THE IMPACT
AS CDK OUTAGE DRAGS ON

By Eva Rothenberg, CNN
5 minute read
Updated 10:30 PM EDT, Tue June 25, 2024
Link Copied!
Cars sit on a Chevrolet dealership's lot on June 20, 2024 in Chicago, Illinois.
A cyber attack on CDK Global, a software provider that helps dealerships manage
sales and service, has crippled the workflow at approximately 15,000 dealerships
across the United States and Canada.
Scott Olson/Getty Images
New York CNN  — 

A CDK Global system outage has affected nearly every aspect of the Mazda
dealership in Seekonk, Massachusetts, where Ryan Callahan is general sales
manager. He says it won’t be a simple fix.

“The financial impact it will directly have on us will take months to correct,
if not years,” Callahan said.

Car buyers and dealers are grappling with the shutdown of the retail software
provider, which has left nearly 15,000 car dealerships across North America
struggling to provide services to customers and scrambling to find temporary
analog solutions to operate.

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CDK says it’s working on restoring its systems and expects them to be back
online in several days, but in the interim, customers and dealership employees
remain beset by long wait times, delays – and missed chances to make or save
money.

Tom McParland, the owner of AutoMatch Consulting, a national car buying service,
said the outage was impacting customers because they have fewer dealers to
choose from.

“It reduces their ability to get a deal,” he said. “It limits the customer’s
leverage.”

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Some dealers also can’t apply factory rebates without CDK’s software, so
customers may miss out on money-saving deals. For customers looking to buy a
car, McParland suggested casting a wide net and shopping outside their local
market to find the best price.


‘THEY AREN’T REALLY ABLE TO DRIVE THEIR CARS’

Midway Automotive uses a CDK product to register cars with the Massachusetts
Registry of Motor Vehicles.

Owner Michael Deveney says that after the shutdown on Wednesday, the dealership
started sending customers to their local RMV office in order to register their
cars in person after purchase.

“That was up until Thursday. Then customers started being told that (the RMV)
wasn’t taking any walk-ins,” he said. “They were probably getting flooded with
customers and started turning people away.”

Deveney said one customer got increasingly agitated because he couldn’t register
his car. “Getting an appointment might take three or four days, and in that time
they aren’t really able to drive their cars,” he added.

Some 30 miles north in Lynn, Katelyn Salvato says she hasn’t been able to
register a vehicle since last Tuesday. Salvato works as a title clerk for Pride
Motor Group, registering cars for three dealerships.

“Today… I sent 21 registrations to be done manually at the Massachusetts RMV,”
she said, adding that the RMV won’t accept transactions from dealership
employees. “The transactions must be dropped off within the designated hours (of
10 am to 3 pm), and the runner can’t wait for them.”

Callahan echoed those concerns. Under normal circumstances, the CDK software
allows the dealership to register a vehicle almost instantaneously, but now the
process faces heavy delays.

“Our remote registration system is rendered useless without CDK to talk to it.
We’ve had to send a runner with the registrations to the DMV to be competed in
packs, costing several days where prior it took hours,” Callahan said in an
interview with CNN.

If a vehicle isn’t registered within seven days of purchase, the state penalizes
both the dealership and customers.

The Massachusetts Department of Transportation, which oversees the state’s RMV,
has not responded to CNN’s request for comment.


SERVICE AND SALES GO ANALOG

Salespeople and service employees who spoke with CNN say they’ve resorted to
using pen and paper to process purchases, which has drawn out the amount of time
it takes to buy a car, according to Scott Campbell, a salesman at Capital City
Buick GMC in Berlin, Vermont. He estimates wait times have doubled or tripled.

Nicolas, who declined to provide his full name because he was unsure about his
employer’s stance on speaking to the media, is a clerk in the parts department
of a Porsche dealership in Los Angeles. He said he has been using “a mix of pen
and paper, Excel sheets, and extra care for each invoice” since the shutdown.

Since many dealerships use CDK products to manage inventory, Nicolas said his
department is now forced to manually record inventory parts, which slows their
work down significantly. “We don’t have clear view of stock and have to do
regular inventory on our most used parts,” he added.

But sometimes the analog workarounds are not enough.


DELAYS AT DEALERSHIPS

Several buyers and repair customers tell CNN they’ve experienced long delays.

Don Aycock told CNN he drove 90 miles round-trip from his home to a car
dealership in Clay County, Florida, to buy a new Buick on Thursday, a day after
the CDK shutdown. He told CNN he was able to buy the car but was unable to sign
the title.

“We got a call from them today that we can come next Thursday to sign the
paperwork for the title and get a permanent license plate,” he said, noting that
it will be another lengthy round-trip drive.

In San Diego — where temperatures in recent days have been pushing 90 degrees —
Robbie Jacob and his wife tried to make an appointment at a Kia service center
to fix their car’s broken air conditioning unit. Jacob said the center told them
it was unable to service the car, citing the CDK cyber incident, as there were
no appointments available and all walk-ins were suspended until next week.


OTHER SOFTWARE PROVIDERS TAKE NOTE

CDK Global isn’t the only management system used by dealerships, and the
back-to-back cyber incidents affecting the company have put their competitors on
high alert, as well.

Cox Automotive, which operates the Dealertrack and VinSolutions software systems
to manage documents and customer service, told CNN that it temporarily stopped
integrating its systems with CDK after the outage “as a precautionary measure to
prioritize safety and security for our clients.”

“While actively supporting our customers to continue to run their business, we
established a secure microsite that our customers are actively using now to
access support and guidance, work-arounds and actions they can take while CDK
systems are not available,” the company said.

Tekion, another software company used by dealerships, said it has “seen an
increase in inquiries from dealers in light of the recent CDK incident.”

And other industry experts told CNN that switching from one system to another is
not an action that dealerships can just take on a whim. Businesses are often
locked into a multi-year contract with a software provider. Switching software
also means training employees, making it a lengthy process.

Meanwhile, Asbury Automotive Group, one of America’s largest care retailers and
service providers, warned investors Monday that the CDK outage has hurt its
business, and it’s unclear when it will end. Rival Group1 Automotive said CDK
believed the outage would be resolved in days, not weeks, but it was unclear how
much financial damage the company faced as a result.

A previous version of this article incorrectly stated the name of AutoMatch
Consulting, a national car buying service.

CNN’s Nathaniel Meyersohn contributed to this reporting.


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relevance of advertising campaigns.

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MEASURE CONTENT PERFORMANCE 15 PARTNERS CAN USE THIS PURPOSE

Measure content performance

Information regarding which content is presented to you and how you interact
with it can be used to determine whether the (non-advertising) content e.g.
reached its intended audience and matched your interests. For instance, whether
you read an article, watch a video, listen to a podcast or look at a product
description, how long you spent on this service and the web pages you visit etc.
This is very helpful to understand the relevance of (non-advertising) content
that is shown to you.

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UNDERSTAND AUDIENCES THROUGH STATISTICS OR COMBINATIONS OF DATA FROM DIFFERENT
SOURCES 22 PARTNERS CAN USE THIS PURPOSE

Understand audiences through statistics or combinations of data from different
sources

Reports can be generated based on the combination of data sets (like user
profiles, statistics, market research, analytics data) regarding your
interactions and those of other users with advertising or (non-advertising)
content to identify common characteristics (for instance, to determine which
target audiences are more receptive to an ad campaign or to certain contents).

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DEVELOP AND IMPROVE SERVICES 32 PARTNERS CAN USE THIS PURPOSE

Develop and improve services

Information about your activity on this service, such as your interaction with
ads or content, can be very helpful to improve products and services and to
build new products and services based on user interactions, the type of
audience, etc. This specific purpose does not include the development or
improvement of user profiles and identifiers.

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ENSURE SECURITY, PREVENT AND DETECT FRAUD, AND FIX ERRORS 43 PARTNERS CAN USE
THIS SPECIAL PURPOSE

Always Active

Your data can be used to monitor for and prevent unusual and possibly fraudulent
activity (for example, regarding advertising, ad clicks by bots), and ensure
systems and processes work properly and securely. It can also be used to correct
any problems you, the publisher or the advertiser may encounter in the delivery
of content and ads and in your interaction with them.

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DELIVER AND PRESENT ADVERTISING AND CONTENT 34 PARTNERS CAN USE THIS SPECIAL
PURPOSE

Always Active

Certain information (like an IP address or device capabilities) is used to
ensure the technical compatibility of the content or advertising, and to
facilitate the transmission of the content or ad to your device.

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MATCH AND COMBINE DATA FROM OTHER DATA SOURCES 30 PARTNERS CAN USE THIS FEATURE

Always Active

Information about your activity on this service may be matched and combined with
other information relating to you and originating from various sources (for
instance your activity on a separate online service, your use of a loyalty card
in-store, or your answers to a survey), in support of the purposes explained in
this notice.

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LINK DIFFERENT DEVICES 28 PARTNERS CAN USE THIS FEATURE

Always Active

In support of the purposes explained in this notice, your device might be
considered as likely linked to other devices that belong to you or your
household (for instance because you are logged in to the same service on both
your phone and your computer, or because you may use the same Internet
connection on both devices).

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IDENTIFY DEVICES BASED ON INFORMATION TRANSMITTED AUTOMATICALLY 33 PARTNERS CAN
USE THIS FEATURE

Always Active

Your device might be distinguished from other devices based on information it
automatically sends when accessing the Internet (for instance, the IP address of
your Internet connection or the type of browser you are using) in support of the
purposes exposed in this notice.

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STRICTLY NECESSARY COOKIES

Always Active

These cookies are necessary for the website to function and cannot be switched
off in our systems. You can set your browser to block or alert you about these
cookies, but some parts of the site will not work.

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