COVID-19 and Auto Dealers: Adjusting to the New Normal

In most states, automobile dealers have been deemed essential businesses, allowing them to stay open while many businesses around them have shuttered during the COVID-19 crisis. Despite the ability to continue operating, circumstances are anything but typical — for example, personal contact with customers is limited in many places. Even after restrictions lift, businesses will likely continue operating with some modifications. Adjusting to these conditions — the new normal — is vital for the success of your business. Ownership and management should create a plan to follow local, state, and national guidelines with customers’ safety in mind while helping slow the spread of the virus.

A Healthy Environment

Among the highest concerns during the pandemic and in the reopening period is providing an environment for your customers and employees that is as healthy as possible. That will continue to be the case even when businesses are allowed to open up on a large scale. As an auto-dealer, you have two major areas to consider: your buildings and your vehicles.

Pay special attention to the arrangement of your indoor spaces. Social distancing guidelines apply everywhere, and will likely continue when business begin to reopen to the public, so help your customers remain at least six feet apart. If your showroom contains areas where customers tend to gather or line up, mark the floor with tape or decals to remind them to keep their distance. If your building contains waiting areas, space seating at least six feet apart to avoid crowding. Signs posted at entrances and throughout the building can also go a long way toward helping people follow social-distancing guidelines. If you have already enacted these measures, check them often to ensure they are still present and effective.

When cleaning your indoor spaces, such as offices and showrooms, disinfect high-use surfaces — countertops, railings, and even the exteriors of vehicles. Do this often and in view of your customers to reassure them that you have their safety and health in mind.

Apply detail-oriented disinfecting practices to the vehicles your customers test-drive, too. Pay special attention to the surfaces drivers most often touch, including:

  • steering wheels
  • shifters
  • wiper controls
  • door handles
  • radio knobs
  • dashboards
  • windshields
  • seatbelts

Follow the manufacturer’s recommendations for use of cleaning chemicals on surfaces that could be prone to damage, such as rubber, leather, aluminum, or plastic. Also consider keeping disinfecting wipes in vehicles for customer use, or have your sales staff provide them to customers before they enter the vehicles.


Some dealerships are minimally staffed and have restricted hours of operation. While these measures are unfortunate requirements of helping keep businesses afloat, they also provide extra opportunities for thieves to take advantage of the situation.

Now is a good time to review your security. The points below are not all inclusive, but are a starting point for considering your business’s vulnerability to losses.

The Sales Lot

  • Ensure that your lighting is good quality and is on from dusk to dawn.
  • Protect your sales lot perimeter with sturdy barriers or fencing.
  • Block low-traffic lot entrances.
  • Block active (open) entrances after business hours.
  • Fit blocker vehicles wheel-locking devices.
  • Hire a security service to patrol premises at irregular intervals.
  • Secure padlocks during the day to prevent lock switching.

Anti-Theft Practices

  • Park high-value or rare vehicles indoors.
  • Complete physical inventory of vehicles and reconcile it with records at least weekly.
  • Create and/or enforce a policy that prohibits leaving keys and fobs in vehicles.
  • Store keys and fobs out of sight of customers in a locked enclosure.
  • Restrict access to key and fob storage to authorized employees.
  • Complete an inventory of keys and fobs at close of business.
  • Create and/or enforce a policy requiring employees to lock customer vehicles after they are driven out of the service department and parked.
  • Park customer vehicles indoors after closing if you can.

Inside Buildings

  • Ensure lighting in all areas with windows.
  • If you have one, always arm your burglar- and fire-alarm system when leaving for the night.
  • Turn off power to each overhead door off when the service department closes. But first, verify that circuit breakers are designed for use as a switching device.
  • Consider equipping doors with double-cylinder deadbolts, which require a key to open or lock them from either side.

Federated Insurance® clients can access COVID-19 resources, including an online training course for dealership managers and employees in Federated’s Shield Network®. Talk to your Federated Marketing Representative about these and other risk management resources.

There’s no telling when dealerships will be able to return to business as usual, but in the meantime, do everything you can to help protect your business, your employees, and your customers from the new hazards that COVID-19 has presented.

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The information in this article and in these materials is for general information only and should not be considered legal or other expert advice.  The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for any laws, regulations, ordinances, or other executive orders that may apply in your state.  The materials provided may contain information developed by third parties wholly independent of Federated.  Federated provides this information as a courtesy to its clients with the understanding that neither Federated nor its employees provide legal or other expert advice.  Since each business situation is unique, qualified legal counsel should be sought with questions specific to your circumstances and in responding specifically to COVID-19.

Published Date:June 04, 2020

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