After all the research, test drives and negotiations, when a customer chooses to purchase a car, they are putting their trust in the hands of the dealer.
Beyond the large financial commitment, the customer will hand over more personal information than that customer likely shares with any other institution. Name. Address. Social Security Number. Driver’s license. Insurance policy. It is now the dealer’s responsibility to protect that information. But data security is not the primary business for auto dealers.
In 2022, companies lost $9.4 million on average as a result of a company data breach, and auto dealers are ripe targets for hackers. In 2022, 15% of auto dealerships reported that they had sustained a cyberattack that year. Beyond the financial impact of the data breach itself, hacks can have devastating effects for the reputation of a dealership; 84% of customers surveyed by Total Dealer Compliance reported that they would not buy another car from a dealership after it became public that the buyers’ data had been compromised.
As more of the car buying process goes digital, it is all the more important for dealerships to take steps to ensure that buyers’ sensitive information is safe throughout the purchase process. While the current Safeguards Rule requires a breach response plan to be in place, many dealers have failed to act on it. In fact, 63% of dealerships do not currently have a data breach response plan in place.
Regulators have taken notice and have implemented new security and privacy rules for dealerships. The Enhanced Safeguards Rule require that dealers have a breach readiness response plan in place by June 9, 2023. In the event of a breach which includes non-public personally identifiable information, dealers may be required to provide free credit monitoring services to impacted customers.
The National Automobile Dealers’ Association has estimated that compliance with the new Enhanced Safeguards Rule will cost a single dealer $276,925 per year. Hoping to avoid an incident and waiting until it’s too late to secure a preferred vendor can lead to excessive costs and can risk non-compliance.
With fewer than half of dealers reporting they are well-prepared for compliance, the rapidly approaching June deadline may seem daunting to many owners.
Complying with new regulations can feel like a major undertaking, but there are a couple of proactive steps dealers can take to speed themselves up on the path to compliance and it could unlock new revenue streams for dealerships at the same time.
Compliance that Pays
The answer to what dealers can do to ensure that they are prioritizing their customers’ trust may lie in offering buyers identity theft protection at the point of sale. A simple to sell and fully integrated solution might be what dealers need to save money while reducing risk and maintaining their reputation. Not only does this give dealerships a breach response readiness plan, it also offers customers proactive protection against any bad actors that may be out to steal their data.
A reseller program in partnership with a comprehensive online safety solution has two major benefits:
- Simple to sell and implement: The solution can be seamlessly integrated into dealership menus for simple and fast e-contracting. The low monthly cost of such solutions is also easy to add into F&I bundles with minimal impact to monthly payments.
- A proven, scalable path to revenue: Competitive incentives and special low pricing for buyers allow dealers to significantly increase their revenue and commission potential.
Consumer cybersecurity company Aura found that with this model, over 50% of buyers opt-in to purchase multiple years of coverage of Aura’s program. Offering a solution that offers financial fraud protection, identity theft protection, privacy and device protection, along with family online safety features in one allows buyers to rest easy knowing that their most precious assets online are protected.
With cybercrime continuing to exacerbate Globally, it’s imperative that dealerships, providing Americans with one of their hallmark financial decisions, take the steps necessary to protect both their businesses and customers from the inevitable devastation that a data breach or cyberattack could cause.
