What "Stay At Home" Orders Mean For Automotive Dealerships

Stay at home orders are being issued across the country that will affect approximately 80 million Americans starting next week. As of now, all stay at home orders include the shutdown of non-essential businesses, but what businesses can stay open and how the order will be enforced remains open for interpretation especially for automotive dealerships.  

8 out of 10 states that are closing non-essential businesses are allowing for parts and service departments of automotive dealerships to remain open. The exceptions are Ohio, which is allowing for the sales department to remain open and Nevada, which is allowing for online sales and delivery to remain open.

Many state franchise dealer associations are working with their respective state legislators in defining whether a dealership’s sales department is an essential business. It is too early to tell if the state associations will be able to include some part of sales as essential. Variations of the inclusion of sales could be:

• Allowing online sales and delivery of vehicles
• Allowing only commercial vehicles
• Allowing sales to only workers who serve other essential businesses.

Also, the enforcement of keeping non-essential business open will vary by state as many dealerships in the bay area who had the shelter in place notice since 03/16/2020 have kept their dealership sales department open without much restrictions from local authorities.  

Another thing to keep in mind is that there might be additional county and city restrictions that are placed on top of the state. In the case of differing city, county and state regulations, the rule of thumb is to take the strictest regulation as valid. Some more information can be found on CNCDA’s coronavirus website: https://www.cncda.org/dealer-coronavirus-resources/.

For dealerships in states that have not issued a stay at home order can, you can refer to the chart that I compiled of all the states with the highest increase in coronavirus confirmed cases in the last 5 days. The chart below calculated the average 5 day coronavirus count increases to predict which states might issue the stay at home order next. Lightest blue color denotes states that have not had a total of 50 cases reported. Based on this chart, Michigan, Tennessee, Wisconsin, Texas, Maryland, Ohio and Florida and Georgia could be the next states that implement a stay at home order.  Oregon and Florida might have a stay at home order in place by next week as Oregon is being pressured by several majors for the governor to take action and Florida is close to passing the state at home order.  One thing that could make this a lot easier to follow is if a federal stay at home order is issued which is a possibility at this point.

When a stay at home order is implemented, I strongly suggest all dealerships to wind down their sales department, cut all variable costs including advertising, and save their resources for when these restrictions are slowly lifted.