In January 2018, North Carolina Auto Dealers Association President Robert Glaser predicted a battle over dealership management system data would be waged at the state level. In at least five states, the fight has begun.
In Montana, Arizona and Oregon, dealers scored a win by lobbying their state legislatures to pass laws this year giving them control over data stored in a DMS while also preventing the software providers from charging a fee to third parties. A related law was enacted in Hawaii last year, and similar legislation has been introduced in North Carolina. The dealer push is not expected to stop there.
"It's going to go across the country," said Bruce Knudsen, executive vice president of the Montana Automobile Dealers Association. "The most important thing for dealers is to [be able to] control your own data."
As technology to collect and store consumer data has evolved, dealerships increasingly rely on interconnected, third-party-provided systems to store it.
Large DMS companies such as CDK Global and Reynolds and Reynolds, as well as some privacy experts, say this potentially leaves sensitive data susceptible to hacking if that data is not adequately protected. They oppose the dealers' legislative push. Dealers, however, argue they can protect their own data and simply need more control over it.
While data security is being tackled at the state level, it's a long-standing concern of the National Automobile Dealers Association.
Jared Allen, vice president of communications at NADA, said the association is supporting its members in the fight.