Car dealers idle waiting for CDK to resolve software hack

Slow acceleration after a major ransom hack against a global software company is causing car dealers to idle just before the July 4 holiday sales period.

CDK Global, the company that powers many aspects of car dealerships around the world, gave CBS Moneywatch an update on what they called a ransom event.

“We have successfully brought a small initial test group of dealers live on the Dealer Management System (DMS), and once validation is complete we will begin phasing in other dealers,” according to a company statement.

There is no update on how many dealers are back online. Spectrum News requests to CDK have been unanswered.

CDK says its software, which specializes in a dealer management system that manages the entire car dealership for those who use CDK software, is used by approximately 15,000 dealers.

Dealers can still sell cars. They can still service cars, they just have to do a lot of things manually now, which is more time-consuming.

Todd Caputo, the head of Todd Caputo Consulting, has owned car dealerships in New York for 30 years. He says CDK software is like the heart of a dealership. It takes care of sales, service, parts, accounting and payroll in some cases.

He has been working with various clients through this and says this is not stopping the car business, but customers might notice things happening a little bit slower than normal, and the impact will be felt after the system is restored.

“Once the system gets turned back on, there’s gonna be a lot of data entry that needs to get done by dealers, and it’s going to require weeks, if not months of work in some cases,” Caputo said. “So if you go to the dealership right now and get some work done, you might not be able to get a copy of the repair order. It lists all the services that you had done for your oil change, your brakes, your tires … You might have to get [it] emailed to you in a few weeks or get it mailed to you or things like that.”

Caputo says there’s definitely an economic impact from this cyber attack, as dealers were paralyzed the first few days. It will take payroll longer to happen and delays for vendors to be paid for many impacted.