Big threats dealers are facing — and how they could overcome them

Hey, everyone. In case you missed it, in partnership with NNN Pro, I’m hosting a private party in NOLA during the 2025 NADA Show for industry leaders and top dealers to celebrate and connect.

We’re gearing up our preparations now. Space is tight, so if you haven’t signed up yet, jump on the waitlist here.

If you’ve already added your name previously, there’s no need to do anything else. We’ll begin reviewing the list next month and be in touch then … Can’t wait.

—CDG

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Dealers face all kinds of risks during the day-to-day, like juggling inventory, keeping up with changing consumer demand, managing interest rates, and of course, hitting sales targets… But I’m not here to talk about that. I want to dig into (some) of the unforeseen threats — the kind that can leave dealerships blindsided and vulnerable. And — more importantly — what dealers are doing about them.

Let’s unpack a handful of recent (and influential) developments… with some CDG context, of course.

First, understanding the realities of cyberattacks and risk…

The CDK Global cyberattack in June disrupted 15,000 dealerships for days, rendering their systems pretty much offline and halting sales. Although CDK bounced back quickly—Sonic Automotive even renewed its contract in a major announcement—dealers learned a tough lesson: cyberattacks are a real threat, and nobody’s immune. Dealers especially have a bullseye on their backs thanks to their large amounts of sensitive data and cash flows.

Think of it this way: If there is any kind of disruption like a system crash, the internet goes down, or the power goes out, how can dealers keep selling cars?

I spoke to several top retailers last week who gave me their best practices, like:

Printing copies of contracts, warranties, and inventory lists to keep business flowing when digital systems go down — it might be basic, but it works. Others are hiring IT pros to keep things on track and set up strict protocols like deleting old employee accounts and using multi-factor authentication.

The goal? Close off entry points like phishing emails and weak passwords, move cloud-based data to real-time backups that are isolated from the internet, and know exactly how to handle communication during an outage.

It’s true – dealers can't stop a third-party vendor from getting hacked, but they’re still on the hook for their data—even when it's handled by someone else. (FYI, by law, dealers have to evaluate the scope of any vendor breach).

But it doesn’t stop there, one prominent dealer out West started having higher level talks with vendors and auditing his contracts immediately. His advice to others? Make sure the contracts include data security clauses, breach notifications, liability coverage, and clear steps for handling incidents.

The last thing dealers want is the FTC knocking on their doors.

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And make no mistake, dealers are bracing for the FTC’s stricter rules…

The FTC’s proposed Combating Auto Retail Scams (CARS) Rule aims to boost transparency, have more disclosure on out-the-door prices, and secure explicit consent for pricing and financing terms during the car buying process. Car buyers are mostly welcoming the changes with open arms, but NADA and other dealer associations argue that it will make the car buying process slower and more cumbersome.

Even if the rule gets watered down, it’s likely to go into effect in some form in 2025, and dealers are already getting a head start.

Many dealers are focusing on their websites first since that’s the easiest place for the FTC to spot non-compliance. But it’s not always a simple fix—dealers rely heavily on third-party vendors for pricing feeds, which often miss details like doc fees and local taxes. So now, they’re working with providers to ensure everything’s covered and planning for any adjustments as the rule takes shape.

But even if the feeds are right, it's a tall order to expect salespeople to quote those price calculations on the spot (who’s building a startup to solve this?!?). There has to be a clear and cohesive process in place that can be easily repeated to come up with the “FTC price.”

Picture this: If a customer calls and asks about that blue Mustang on the lot, the dealer has to give them the full price—fees and all—right then and there. No more, “Let’s talk when you’re here.” Every salesperson needs to know the exact price at all times and document every quote.

And if they don’t? Violations could result in penalties of up to $50,120 per car. That means 250 infractions could rack up a mind-numbing $12.5 million in fines. It’s not about if the FTC will aim for non-compliant dealers—it’s about when.

But the compliance battle with the FTC isn’t happening in a vacuum—dealers are also up against real-world disruptions to their supply.

Storms and strikes are causing unprecedented supply chain headaches…

Hurricane Helene caused flooding in North Carolina, putting Spruce Pine—one of the world’s largest sources of high-purity quartz needed for semiconductors—at risk. Without it, the production of silicon wafers could slow, disrupting the supply chain for months.

At the same time, the ILA’s massive port strike has halted operations at 36 ports from Boston to Houston, disrupting shipments of foreign cars and critical parts. New vehicle inventory may be close to pre-pandemic levels (for now), but parts shortages are another story.

Some proactive dealers preemptively ordered a 90-day supply of common parts like oil filters and brake pads so their service departments can stay afloat. But others, relying on just-in-time deliveries, are turning to costly air freight to dodge shortages.

But a strike of any length could congest rail systems, divert cargo to the West Coast, and trigger a supply chain bottleneck reminiscent of the pandemic’s worst days, said Cox Auto's Erin Keating.

Where does that leave dealers? Some are going straight to their OEMs to find out what is coming down the short and long-term pipeline while focusing on what they can control—like used car acquisition strategies, better inventory management, and finding local sources for parts.

At the end of the day, the smartest dealers know this — being reactive is a time sink that leads to a constant cycle of playing catch-up. Instead, they think like chess players. They’re not just solving today’s problem — they’re already three steps ahead — positioningthemselves strategically for whatever happens next.

Transforming a dealership group Into a... TikTok famous powerhouse!

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Investing $9B in the next generation of automotive disruptors | Bill Cariss

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We’ve got tons of great jobs hitting the CDG Job Board right now:

• Townsend Nissan needs a Service Manager near Tuscaloosa, AL.

• Sheehy Auto Stores is on the hunt for an Automotive Controller in the Richmond, VA area.

• Withum is looking for an Auto Dealership Audit Manager around Braintree, MA.

Looking to hire? Add your roles today—it’s 100% free.

• Kia launches the 2025 Ray EV starting under $21,000.

• Walz touts EV jobs as he spars with Vance on clean energy in VP debate.

• Auto dealer associations activate emergency relief funds in Helene aftermath.

• John Cena spent $500K on this BMW V12-powered Lambo Diablo replica.

• GM’s Cruise to pay $1.5M penalty after failing to fully report crash involving pedestrian.

Thanks for reading. See you on the next edition…

—Car Dealership Guy

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