Can I even buy a car? What to know about the massive auto dealer outage | CNN Business (2024)

Can I even buy a car? What to know about the massive auto dealer outage | CNN Business (1)

A worker walks through the lot of Paragon Honda and Acura car dealership in the Queens borough of New York on Thursday, July 15, 2021.

New York CNN

CDK Global is ubiquitous in the auto dealership world – its software is used at 15,000 dealers. Its products handle everything from records to scheduling.

Now, thousands of dealerships across the United States and Canada are entering a third day in a near deadlock after two consecutive cyber incidents at CDK Global led to a shut down of its systems.

There’s never an opportune time for a systems outage, but it’s now the official start of summer, a time when many Americans are shopping for a new car and dealerships enjoy a bump in sales. Here’s what the CDK Global outage means for both car sellers and shoppers.

What exactly happened?

On Wednesday, CDK spokesperson Lisa Finney told CNN that the company was investigating a cyber incident.

“Out of an abundance of caution and concern for our customers, we have shut down most of our systems and are working diligently to get everything up and running as quickly as possible,” Finney said in the statement.

Later Wednesday, the company said most of its critical computer systems were back online. But Thursday morning, the company told dealerships another incident had happened.

North Carolina-based Sonic Automotive said it was a “cybersecurity incident.” CNN has asked CDK to confirm.

Are systems still shut down?

CDK said it proactively shut down most of its systems after it experienced an additional cyber incident late in the evening on Wednesday, June 19.

“In partnership with third party experts, we are assessing the impact and providing regular updates to our customers. We remain vigilant in our efforts to reinstate our services and get our dealers back to business as usual as quickly as possible,” the company said in a statement Thursday.

On Thursday afternoon, the company said it still had no new information.

The company told dealers the systems could be down for several days, according to two sources briefed on the situation.

What does CDK Global do?

CDK Global provides data and technology to different automotive dealerships. Its systems are used by roughly 15,000 car dealerships across the United States and Canada.

CDK operates different products that car dealers use to handle things like keeping records of negotiated deals to scheduling and communicating about service. Not every dealer uses CDK’s products, and even those that do may not use them for everything, but the system shutdown has been a problem for many.

To protect customer privacy, customers’ details aren’t written out on a piece of paper that’s just sitting on a desk anymore. Instead, information about deals and customer appointments iskept in a server that’s now impossible for salespeople affected by the outage to access.

Why is this a bad time for dealerships?

The outage can eat into sales during the first official weekend of the summer. Summer is car-buying season.

CDK said it themselves in a blog post on its site last week.

Post Memorial Day, “this presents increased opportunities for vehicle sales, service and, of course, revenue. It also means that it’s time to roll out your summer Sales and Service marketing campaigns.”

In a Securities and Exchange Commission filing, Sonic Automotive said the outage resulted in disruptions to its dealer management system hosted by CDK, “which supports critical dealership operations including those supporting sales, inventory and accounting functions and its customer relationship management system.”

The company said that while the outage has affected its business operations, it hasn’t determined the financial impact.

Can I still buy a car?

Jeff Ramsey, an executive with Ourisman Auto Group, which is headquartered in Maryland, told CNN the shutdown is a major hassle and could cost his dealerships some business. Customers who are delayed in closing a sale at one of his dealerships could just find a dealer nearby that’s not having these issues and buy a new vehicle there, instead.

However, some affected dealerships are still selling cars.

“My selling team can hand-write a buyer’s order,” said Brian Benstock, general manager of Paragon Honda and Paragon Acura in Long Island City, New York.

But salespeople could lack access to customer agreements that had been previously negotiated, making it harder to close those sales, dealers CNN spoke with said. There’s more than just the negotiated price of the car involved, since these agreements can involve rebates and incentives, some of which customers must show they’re qualified for.

What are automakers saying?

Ramsey, whose company operates a number of dealerships, said automakers including Kia, Toyota and Stellantis, which makes Jeep and Dodge vehicles, have been very helpful with finding ways to serve customers even with all technology issues.

Ford also said its dealerships involved in the CDK outage have alternate ways to take care of customers.

“Although there is an industry-wide system outage for some dealers who use CDK, Ford and Lincoln customers are able to receive sales and service support due to alternative processes available to our dealers. While a customer’s local dealer remains the best place for information about their sales and service needs, they can always contact the Ford Customer Relationship Center at 1-800-392-3673,” Ford said in a statement shared with CNN.

Can I even buy a car? What to know about the massive auto dealer outage | CNN Business (2024)


What are the disadvantages of buying a car from a dealership? ›

Sometimes, used car dealerships charge higher prices than private parties do (and leave less room for negotiation). – Buying from a private seller isn't free of risks. Private sellers aren't bound by the same strict state and federal laws as are dealerships.

What is CDK in a dealership? ›

Auto industry See your latest updates. 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.

What is a CDK hack? ›

CDK, which provides software to car dealerships, was hit by a ransomware attack orchestrated by the BlackSuit group. Dealerships across the country were left unable to manage daily operations, with sales operations heavily affected.

How many dealers are on CDK? ›

CDK serves more than 15,000 retail locations across North America, according to the company.

What not to say when buying a car at a dealership? ›

5 Things to Never Tell a Car Salesman If You Want the Best Deal
  1. 'I love this car. ' ...
  2. 'I'm a doctor at University Hospital. ' ...
  3. 'I'm looking for monthly payments of no more than $300. ' ...
  4. 'How much will I get for my trade-in? ' ...
  5. 'I'll be paying with cash,' or 'I've already secured financing. '
Aug 19, 2019

What are the disadvantages of a large down payment on a car? ›

What Are the Disadvantages of a Large Down Payment? Providing more money down doesn't guarantee a lower interest rate, and it can cut into your savings.

What does PMA mean car dealership? ›

A dealer's AOR is the sales territory assigned to the dealer by their manufacturer. Different manufacturers may use different terminology such as Primary Market Area (PMA), Area of Geographical Sales and Service Advantage (AGSSA), or another acronym.

What does CRM mean in car dealership? ›

An automotive CRM (customer relationship management) is a software solution that helps car companies with customer service, sales, and marketing.

What is the difference between an auto distributor and dealer? ›

Although the words “dealer” and “distributor” are often used interchangeably, they are, in fact, not synonymous. There are significant differences between the two, besides the fact that dealers deal with the final consumer and distributors have direct contact with manufacturers.

Who is attacking CDK? ›

A hacking group called BlackSuit is behind the cyberattack on CDK Global that's paralyzed car sales across the US, according to Allan Liska, a threat analyst at the security firm Recorded Future Inc.

What's going on with CDK? ›

What's happening: CDK Global, a data provider whose software is used by car dealerships to handle everything from records to scheduling, was hit by cyber attacks on June 19 that caused the company to shut down most of its systems. Cars sit on a Chevrolet dealership's lot on June 20, 2024 in Chicago, Illinois.

Who are the CDK hackers? ›

The cybercriminals behind the CDK attack are linked to a group called BlackSuit, Bloomberg reported on Monday, citing Allan Liska of computer security firm Recorded Future. In a June 21 story, the media outlet also said the hackers were demanding tens of millions of dollars and that CDK planned to pay the ransom.

Who is the largest auto dealer? ›

If you've ever wanted to know which car dealer is the world's largest, here's your answer: It's a dealership called Longo Toyota, it's located in El Monte, California (in the Los Angeles area), and it's truly, unbelievably, absurdly massive.

Who is the largest auto dealer group in the US? ›

In comparison, Lithia Motors has continuously expanded its dealership network without falter since 2014, acquiring 32 locations in 2022 alone. With over 290 storefronts, it now claims to have surpassed AutoNation in size, making it the biggest dealer group in the U.S.

Who bought out CDK? ›

Last April it was announced that CDK Global, Inc., was being acquired by Brookfield Business Partners for $8.3 billion. Under merger agreement terms, CDK shareholders were said to receive $54.87 per share in cash upon completion of the transaction.

What are the weaknesses of a car dealership? ›

Examples of Strengths, Weaknesses, Opportunities and Threats for the SWOT of a car dealership
Strong brand reputationLimited online presence
Wide range of vehicle optionsDependence on economic conditions
Experienced and knowledgeable sales teamHigh overhead costs
7 more rows
Nov 21, 2023

What are the disadvantages of dealer financing? ›

Cons of financing through a dealership
  • Higher interest rates and less favorable terms.
  • Lender options may be limited.
  • Qualification requirements vary.
  • Risk of hidden markups.
  • Higher credit thresholds for more favorable terms.
  • Potential for higher down payment requirements, especially if you have a lower credit score.
Dec 20, 2023

What is the advantage of buying from a dealership? ›

You'll be able to get a vehicle history report in most cases, and possibly a warranty of some sort. Used car dealerships can also offer a wider variety of cars than a private seller, plus financing and other financial assistance options to help ensure a smooth transaction.

Which is a disadvantage of trading a car into the dealership? ›

Other cons of trading-in include: Fixed trade-in price may be lower than you expect. You may feel you have less control of the deal. Any money you recently spent on repairs isn't considered.

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