‘Months to Fix, If Not Years’: Auto Dealers and Customers Feel Impact of Continuing CDK Outage

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

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

Auto buyers and dealers are grappling with the retail software provider’s shutdown, which has left nearly 15,000 auto dealerships across North America struggling to provide service to customers and in difficulty in finding temporary analog solutions to work.

CDK says it is working to restore its systems and expects them to be back online within a few days, but in the meantime, customers and dealership employees continue to face long wait times, delays and missed opportunities to earn or save money.

Tom McParland, owner of Automatic Consulting, a national car buying service, said the outage affected customers because they had fewer dealerships to choose from.

“It reduces their ability to make a deal,” he said. “This limits the influence of the customer.”

Some dealers also can’t apply factory discounts without the CDK 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 of their local market to find the best price.

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

Owner Michael Deveney says after Wednesday’s closing, the dealership began sending customers to their local RMV office to register their cars in person after purchase.

“That was until Thursday. Then customers started being told (the RMV) wasn’t showing up,” he said. “They were probably inundated with customers and started turning people away.”

Deveney said one customer was becoming increasingly agitated because he couldn’t register his car. “It can take three or four days to get an appointment, and in that time they’re not really able to drive their car,” he added.

About 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 completed manually at the Massachusetts RMV,” she said, adding that the RMV will not accept transactions from dealership employees. “Transactions must be submitted within the designated hours (10 a.m. to 3 p.m.), and the rider cannot wait for them.”

Callahan echoed these concerns. Under normal circumstances, the CDK software allows the dealer to register a vehicle almost instantly, but the process is now facing big delays.

“Our remote recording system becomes useless without CDK to talk to it. We had to send a runner with registrations to the DMV to compete in packs, which cost us several days whereas before it took hours,” Callahan said in an interview with CNN.

If a vehicle is not registered within seven days of purchase, the state penalizes both the dealer and customers.

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

Service and sales become analog

Salespeople and service workers who spoke with CNN said they resorted to pen and paper to process purchases, which lengthened the time it took to buy a car, according to Scott Campbell, a salesman at Capital City Buick GMC in Berlin, Vermont. He estimates that wait times have doubled or tripled.

Nicolas, who declined to give his full name because he was unsure of his employer’s stance toward the media, is employed in the parts department of a Porsche dealership in Los Angeles. He said he has been using “a mixture of pen and paper, Excel sheets and special care for each invoice” since the closure.

Since many dealers use CDK products to manage their inventory, Nicolas explains that his department is now forced to manually register parts in stock, which slows down their work considerably. “We do not have a clear view of the stock and must regularly take inventory of our most used parts,” he added.

But sometimes analog solutions aren’t enough.

Several buyers and repair customers told CNN they 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 CDK closed. He told CNN he was able to purchase the car but was unable to sign the title.

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

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

CDK Global is not the only management system used by dealerships, and the back-to-back cyber incidents affecting the company have also put their competitors on alert.

Cox Automotive, which leverages Dealertrack and VinSolutions software systems to manage documents and customer service, told CNN it temporarily stopped integrating its systems with CDK after the outage “as a precaution to prioritize the safety and security of our customers.”

“While actively helping our customers continue to run their businesses, we have created a secure microsite that our customers are now actively using to access support and advice, workarounds and actions they can take when CDK systems are not available,” the company said. .

Tekion, another software company used by dealers, said it had “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 isn’t an action dealers can take on a whim. Companies are often tied to a multi-year contract with a software vendor. Changing software also means training employees, which makes the process time-consuming.

Meanwhile, Asbury Automotive Group, one of the largest retailers and healthcare providers in the United States, warned investors on Monday that the CDK outage had hurt its business and that it was unclear when it would end. Rival Group1 Automotive said CDK believed the outage would be resolved within days, not weeks, but it was unclear how much financial damage the company would have suffered.