CDK Global Service Outage: Car dealerships and customers are feeling the impact as the lockdown period continues

New York
CNN
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The CDK Global system outage 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 solution.

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

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

CDK says it's working to restore its systems and expects to be back online within several days, but in the meantime, customers and dealership employees continue to experience long wait times and delays — and missed opportunities to earn or save money.

Tom McParland, owner of Automatic Consulting, a national car-buying service, said the power outages are impacting customers because they have fewer dealers to choose from.

“It reduces their ability to reach an agreement,” he added. “It limits the client's leverage.”

Some dealers also can't apply manufacturer discounts without a CDK, so customers may miss out on money-saving deals. For customers looking to purchase a car, McParland suggested casting a wide net and shopping outside their local market to find the best prices.

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

Owner Michael Deveney says that after closing on Wednesday, the dealership began sending customers to the local RMV office to register their vehicles in person after purchase.

“That was until Thursday. Then customers started being told that (RMV) wasn't accepting any entries.” “They probably had a flood of customers and started turning people away.”

One customer became increasingly agitated because he couldn't register his car, Devenney said. “Getting an appointment can take three or four days, during which time they're not really able to drive their cars,” 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, where he registers cars for three dealerships.

“Today…I sent 21 registrations to be done manually at the Massachusetts RMV,” she said, adding that the RMV will not accept transactions from agency employees. “Transactions must be delivered within the designated hours (10 a.m. to 3 p.m.), and the runner cannot wait for them.”

Callahan echoed these concerns. Under normal circumstances, the CDK software allows the dealer to register the car almost instantly, but the process is now experiencing significant delays.

“Our remote registration system was useless without CDK talking to it. We had to send a rider with the registrations to the DMV to compete in the packages, and it took days when it used to take hours,” Callahan told CNN.

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

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 personnel who spoke with CNN say they have resorted to using pen and paper to process purchases, which has lengthened the amount of time it takes to purchase a car, according to Scott Campbell, a sales representative at Capital City Buick GMC in 2018. Berlin, Vermont. It is estimated that wait times have doubled or tripled.

Nicholas, who declined to give his full name because he was unsure of his employer’s stance on speaking to the media, is a parts clerk at a Porsche dealership in Los Angeles. He said he has been using “a combination of pen and paper, Excel spreadsheets and extra care with every invoice” since the shutdown.

Since many dealers use CDK products to manage inventory, Nicholas said his department is now forced to manually record inventory parts, which slows down their work significantly. “We do not have a clear view of the inventory and have to conduct a regular inventory of our most used parts,” he added.

But sometimes analog solutions are not enough.

Many buyers and repair customers told CNN they faced long delays.

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

“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 long trip back and forth.

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 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, that no appointments were available and that all visits were suspended until next week.

CDK Global is not the only management system used by agents, and the successive cyber incidents that have affected the company have put their competitors on high alert as well.

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

“While we actively support our customers to continue running their businesses, we have created a secure microsite that our customers are now actively using to access support, guidance, solutions and actions they can take while the CDKs are unavailable,” 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.”

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

Meanwhile, Asbury Automotive Group, one of America's largest retailers and service providers, Investors beware on Monday that CDK's outage has hurt its business, and it's not clear when it will end. Rival Group1 Automotive said CDK believes… The outage will be resolved within daysNot weeks, but it was unclear how much financial damage the company faced as a result.