AUTOMOTIVE DEALERSHIP
PREDICTIONS FOR 2026
2025 PREDICTIONS RECAP
Continued CDK Fallout Will Spur a Cybersecurity Arms Race It’s been over 18 months, but dealers will still be dealing with the CDK breach and cascading lawsuits in 2026 – making cybersecurity a top priority. Expect heavier spending on vendor assessments, data-mapping, segmentation, and incident-response planning. Plaintiffs’ attorneys and regulators will insist that dealers demonstrate real privacy governance and not just rely on vendors. ICE Enforcement Risk Will Rise – Especially for Parts and Service Dealerships will become a focus of immigration enforcement in 2026, with parts, detail, and service departments drawing the most attention. Employers should expect renewed I-9 audits, potential on-site visits, and more scrutiny of subcontracted labor. OSHA Will Step Up, and Heat Safety Will Take Center Stage Dealers will see increased OSHA enforcement, particularly around heat-related hazards in service bays, detail areas, and outdoor vehicle prep. Expect greater emphasis on ventilation, hydration protocols, acclimatization, and written heat-illness safety programs.
The new administration followed through on shelving the Overtime Rule as we predicted after a court injunction, sparing dealers a major salary-jump headache. But we also correctly noted that wage-and-hour audits wouldn’t slow down. Dealership pay plans, bonus structures, and service-advisor compensation all drew renewed scrutiny, and several states pushed their own compensation-focused enforcement priorities. OT Rule Was Scrapped Exactly as we forecast, the FTC’s aggressive rulemaking pace slowed – particularly around CARS, TILA, and advertising rules – but states saw that as an invitation to step in. Attorneys general in California, New York, Illinois, and Colorado sharpened their focus on auto retail practices, data privacy, and add-on transparency. FTC Stepped Back, but States Filled the Void Another bullseye. Interest-rate uncertainty, tariff threats, and shifting inventory levels made 2025 a volatile year – pushing many dealerships to embrace AI tools just as we predicted. AI- assisted lead scoring, appointment scheduling, inventory pricing, and call-center automation surged. And as predicted, the rapid adoption forced dealers to review job descriptions, restructure BDC responsibilities, and upskill staff to work alongside automated systems. Dealers Turned to AI During Market Volatility
Matthew R. Simpson Atlanta Partner, Co-Chair
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
Christopher C. Hoffman San Diego Partner, Co-Chair
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