Current dealerships handle large volumes of personal customer information, including credit ratings and bank account information. However, as AI-driven infotainment systems become more common, there is an increasing threat that such data will be revealed or misapplied, particularly when combined technologies are not managed correctly. These risks may result in violations, legal disputes, or even court suits.
The good news? With the right policies, safe systems, and a clear understanding of data management processes, dealerships can mitigate these risks and make even smarter decisions about adopting new technology. Learning the proper way in terms of navigating data risks in dealerships is key to a stronger foundation for development. Keep reading to find out how your dealership can perfect the right balance between innovation and security.
Understanding the Role of Data in Modern Dealership Operations
Smart cars are not a new product. In fact, they are already on the streets. But now, the trend is getting nowhere but upwards. According to a McKinsey study, nearly 95% of new vehicles sold worldwide will be connected by 2030.
But the data ecosystem extends far beyond the vehicles themselves. Modern dealerships have evolved into complex digital hubs, where every customer interaction—browsing websites, chatting with virtual assistants, scheduling services via mobile apps, or providing information in showrooms—creates streams of sensitive data.
With apps, chatbot providers, and finance platforms directly integrated into dealership systems, managing and securing this data has become a multifaceted challenge requiring robust solutions.
The New Operating System: A Customer’s Data Journey
Every customer interaction creates valuable data that you’re responsible for managing. From GPS data during a test drive to CRM contact details, chat transcripts, payment information, driving patterns from connected vehicles, and service history shared with technicians, each step in the journey adds a layer of insight.
To handle such data, you must also understand what it is. Automotive data is generally categorized into five main types, each with its own value and risk.
- CRM & Transactional Data: The foundation and pillar of your operation. It includes customer names, phone numbers, government IDs, purchase history, chat records, and more. This data supports marketing, but it also forms the core of your regulatory responsibilities under laws like GDPR2
- .Driver Behavior Data: Involved tracked acceleration, braking habits, and driving frequency. Insurers and dealerships find such information useful in learning about the risk profile. Tesla, for instance, offers insurance in some regions based on real-time driving behavior, showing the high commercial value of this data.
- Telematics Data: It is obtained through vehicle sensors that contain GPS positioning, speed, fuel and engine diagnostics. A dealership managing fleet servicing, for example, can use this to monitor engine alerts and schedule proactive maintenance.
- Infotainment & Preferences: Onboard computers record customer information of the navigation system, music applications, and saved settings. Failure to clear this data prior to resale may reveal the personal habits, contact list, or even saved logins of the former owner.
- Maintenance & Service Records: This is where service bookings, diagnostic warnings, warranty cover and all previous repair history can be found. Although it is crucial to resale value, a violation in this case would expose the owner’s personal information, including vehicle and payment records.
Data Risk Factors
Dealerships face a variety of data risk factors, especially as technology continues to advance. Understanding these risks is crucial for safeguarding customer information.
- Connected Car Vulnerabilities
The data from infotainment and telematics systems creates a direct link to the customer’s personal life. The biggest risk here is data persistence. When a customer trades in a vehicle or brings one in for service, their personal data—paired phones, saved addresses, app logins—remains stored in the system. If your team doesn’t have a strict process for wiping this data, you are exposed. Thus, hackers can exploit vulnerabilities in a vehicle’s software to gain access to the dealership’s internal network.
- Third-Party Integrations
Dealerships are dependent on a network of third-party vendors to finance, insure, service, market and so on. These integrations can turn into weak links. When a vendor has poor cybersecurity measures, it may result in a data breach that puts your customer data at risk.
The June 2024 ransomware attack on CDK Global is a prime example of this risk. The attack on this single software provider shut down its systems, disrupting operations for thousands of car dealerships across North America. In 2025, a ClickFix attack compromised over 100 auto dealership websites by embedding malicious code into a video browser tool used in an advertising campaign.
- Employee Data Management Errors
Many data breaches happen because of simple employee mistakes, often called “human error.” These include actions like clicking phishing links, sharing customer information carelessly, or accessing restricted files without the right authorization.
In fact, sales and finance teams are often victims of phishing attacks, in which cybercriminals fake identities of the customers or financial institutions. This has been called Business Email Compromise (BEC) and the FBI has received upwards of 21,000 complaints in the year 2024.
It is then further amplified by new technology. “Shadow AI” is a growing problem where employees, trying to be efficient, paste sensitive customer information into unauthorized, public AI tools. This unknowingly exposes that data. According to an IBM 2025 Cost of a Data Breach Report, data breaches with shadow AI doubled the breach costs by almost $200,000 on average.
- BYOD & Remote Access Challenges
The risk for data privacy in car dealerships caused by employee error is heightened by remote work. When more employees access dealership systems remotely or use their personal devices (Bring Your Own Device, or BYOD), data governance becomes much harder to enforce.
Other internal risks include legacy systems, where disjointed sales and service tools create “cracks” for data to slip through.
Proven Strategies for Safer Operations
Managing data risk is not about avoiding digital tools. It is about learning to use them responsibly in accordance with protecting customer vehicle data. Dealerships can build a safer, smarter data ecosystem by implementing layered defenses.
- Use a Centralized CRM System
A unified Customer Relationship Management (CRM) system ensures better control over customer data. It integrates all customer touchpoints—sales, service, and advertising—while applying robust security measures, such as data encryption and access controls.
- Conduct Regular Data Audits
Performing regular audits allows you to assess where customer data is stored, who has access, and for how long. This process helps identify critical data points and ensures that you are protecting the most sensitive customer information effectively.
- Provide Ongoing Cybersecurity Training
Human error is a major cause of data breaches. Provide staff with regular cybersecurity training to recognize phishing attacks, use strong passwords, and secure their devices. This ongoing education strengthens your workforce’s ability to respond to security threats.
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- Implement Multi-layered Security Defenses
Using layered security, such as firewalls, intrusion detection systems, and regular software updates, ensures a more comprehensive defense against cyber threats. These layers work together to protect your systems from breaches at every entry point.
- Invest in Cyber Insurance
One attack is enough to bring a dealership down due to the magnitude of exposure. Cyber insurance does not stop an attack, but it will help reduce the extreme financial and reputational harm that is to come. Review your existing business insurance policy, as standard plans may not cover cyber threats.
- Network Segmentation
Separate your networks. Publicly accessible network jacks, public Wi-Fi systems, and internal office Wi-Fi should all be segmented from each other to prevent an intruder from moving between them.
Data as a Trust Builder in Automotive Retail
As vehicle technology continues to advance, data will become the central element of your customer relationships. Soon, your dealership’s ability to protect that data may define your brand reputation more than your showroom aesthetics.
Consider the world we already live in:
➜ With infotainment systems, customers now sync their smartphones, creating new data entry points.
➜ Real-time driving behavior leads to dynamically adjusted insurance pricing.
➜ Predictive alerts from vehicles help schedule timely servicing.
In this world, trust becomes the new currency. And in today’s dealership ecosystem, that trust is earned by how responsibly you manage data.
The question is no longer whether dealerships should use data. The question is whether they are prepared for the responsibility that comes with it. In this connected automotive world, every vehicle sold or serviced is also a contract to protect the digital journey behind it.
Conclusion
Customer trust is not just about selling cars. Trust in automotive data security is a matter of navigating data risks in dealerships with extra care and responsibility. Always remember that an Automotive Manufacturer that take this concern seriously—by building secure, integrated, and transparent systems—will not just avoid risks. They will unlock new value, win lasting customer loyalty, and future-proof their operations for the decade to come. We hope you found these insights helpful! If so, share this article with a friend or colleague looking to stay ahead in today’s advancing automotive world.
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Author: Maverick Steel is a writer and digital marketer who enjoys connecting the dots for strategy and engaging content. He spent 6 years in secondary education as a proud campus journalist, specializing in editorial and column writing. Holding a bachelor’s degree in Marketing Management, Maverick is also a devoted advocate for positive cyber citizenship and a certified pet lover. When he’s not busy writing, you can catch him hitting the gym or enjoying a matcha latte at the nearest aesthetic coffee shop.
