What you need to know about about the great car dealer software hack

Having trouble recently buying a car at a dealer or getting them to service your car?

The likely culprit is a cyberattack on CDK Global, a software provider that thousands of dealers and service centers use for critical pieces of their business. The attack on June 19 has brought dealerships to their knees as they struggle to complete basic tasks with nonfunctioning computer systems.

Here’s what we know so far.

What is CDK Global?

CDK Global, based in Hoffman Estates, Ill., claims to operate in over 15,000 retail locations across North America, offering software — in particular a “dealer management system,” or DMS — that dealers use to process transactions, arrange financing, track parts and suppliers, and perform customer relations management, among other activities.

CDK Global is owned by Brookfield Business Partners (BPU), a Canadian private equity firm that bought it for nearly $6.5 billion in 2023.

What happened to CDK Global, and who cares?

After numerous dealerships across Canada and the U.S. reported system outages, CDK Global revealed it had been the victim of a cyberattack.

“CDK experienced a cyber incident," the company said in a statement to Yahoo Finance. “Based on the information we have at this time, we anticipate that the [recovery] process will take several days to complete,” the company said, adding that it was working with clients on workaround solutions — essentially going back to the pre-data entry days.

“Having to move everything to paper has resulted in both an accounting nightmare and bad buying experiences for consumers — and all during the start of their peak season,” said Stuart McCallum, partner at automotive accounting firm Withum, to Yahoo Finance.

CDK subsequently admitted that the perpetrators were demanding a ransom to restore services; Bloomberg separately reported that the group behind the attack, BlackSuit, is based in Eastern Europe and was demanding tens of millions.

Shares of CDK Global’s parent Brookfield slid 5.7% in Canada on Thursday following reports that the company was hacked for a second time after it tried to restore services.

Why dealers — and customers — are feeling the pain

At the retail level, dealers and their customers have been negatively affected in several ways.

At one end are customers with new car purchases that can’t get processed or ones who have seen purchases delayed. On the other end, and more troublesome, are customers with cars stuck in service departments.

“We're not allowed to let a car go until the repair order gets closed because that's just the way the law works,” a dealer based in Southern California said to Yahoo Finance. “Repair orders can't get closed until we know who's going to pay for it.”