Auto Dealers Can Probably Keep Service Bays Open, But Pandemic Measures May Close Some Showrooms

Auto dealer trade groups got part, but only part, of what they asked for when they asked the federal government to classify auto dealerships as “essential businesses” that could stay open despite widespread business closings in a growing number of states, aimed at containing the COVID-16 pandemic.

The upshot is, there appears to be a growing consensus among federal and state officials that dealership parts and service departments can stay open, since dealer groups argued successfully that customers need dealerships to help keep cars and trucks safe and on the road.

On March 20, the Trump administration confirmed that it views automotive service as essential, according to the National Automobile Dealers Association.

However, that designation apparently does not include dealership sales operations, so it looks as if they must close, in certain states with tight restrictions on non-essential business. Those include California, New York, New Jersey and Pennsylvania, according to their respective dealer associations.

The national dealer association, and state and regional dealer associations around the country, continue to argue that sales operations are essential and should be allowed to stay in business, too.

“Full closure will be catastrophic. We must continue to serve customers so that the automobile industry can be a critical driver in helping Virginia move forward after this pandemic,” said the Virginia Automobile Dealers Association, in a March 20 letter to Gov. Ralph Northam.

The National Automobile Dealers Association, McLean, Va., argued that customers whose cars or trucks are totaled in a crash could need to purchase a replacement urgently. So could more than 1.8 million people whose leases expire between March and July 2020, the dealer group said.

“These types of sales are not optional, they are essential to ensure folks have access to transportation, and goods and supplies keep moving. Personal automobiles are vital to ensuring access to life’s essential needs, including food and healthcare services,” the association said, in a March 20 blog.