CDK Global, a software platform designed to streamline car sales that’s in use at nearly 15,000 dealerships across North America, has been hamstrung for several days due to cyberattacks, and dealers may feel the effects for years. Car dealerships have been riding the gravy train with biscuit wheels since the onset of the pandemic rattled the supply chain and allowed dealers to get away with charging eye-watering mark-ups, but that gravy train has come to a screeching halt.
Check out this article to learn how the cyberattack will impact consumers in the car-buying process.
CDK suffered two consecutive cyberattacks on June 19, and we recently learned that the hackers want millions of dollars in ransom to end the software outage. Bloomberg News reported that the hackers were affiliated with BlackSuit ransomware cartel and that CDK is planning to pay the group the alleged $10 million ransom demand to get things back to normal again, though other sources claim different amounts. CNN Business spoke with affected dealerships across the country to understand the scope of the cyberattack’s impact, though its effects are felt differently by different dealerships.
[Ryan Callahan, general sales manager at a Mazda dealership in Seekonk, Massachusetts] 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.
Even some dealership parts departments are suffering from the cyberattack, with one parts department clerk telling CNN that he’s been forced to shift away from using his dealership’s usual CDK software, and instead use a mix of pen and paper, Excel sheets, and extra care for every invoice. Salespeople have also been interviewed saying they’re also relegated to using a pen and paper. Gag. What year is it, 1990?
The cyberattacks and subsequent software nightmares will leave a long-lasting impact on car dealerships, with one dealer representative telling CNN the financial implications of the attacks will take months if not years to correct. Other car dealership software companies have seen an increase in inquiries since the CDK incident, though they had better hope their software is better protected than CDK’s.