Theft
Managing auto theft risk at the dealership
According to the National Insurance Crime Bureau (NICB), car thefts were up 8% nationwide in 2021 relative to 2020 and 16.5% relative to 2019. And motor vehicle thefts increased 88% for the first three months of 2022 compared to 2021. Not only are these numbers alarming for owners of personal automobiles, but they are a significant cause for concern among dealerships.
Risk Engineer Daryl Allegree has consulted with Direct Markets auto customers for decades, and notes the uptick in theft frequency. “Everyone knows about the car shortage we’ve been experiencing,” Daryl says. “Thieves are not only stealing new cars, they’re also stealing more used cars. And just because there are fewer cars on a dealer’s lot doesn’t necessarily mean fewer thefts. Thieves are capitalizing on the strained demand market.”
According to the NICB report, “Used car values are at historical highs. We have seen a nearly 35% increase in used car values over the last two years due to supply chain issues and inflation. Stolen cars can be shipped overseas and resold or broken down for valuable used car parts in the U.S.”
In metropolitan areas, the current rate of theft per 100,000 inhabitants is 234. In cities outside metropolitan areas, the rate is 159. States with the most car thefts last year were New Mexico, Colorado, Hawaii, Nevada and Oregon. New Jersey saw a 31% increase in car theft over the previous year, and Washington dealt with an incredible 88% increase. States with the least car theft per capita in 2021 were Vermont, Maine, New York, New Hampshire and Idaho.
Daryl notes that coastal cities often see the highest rates of theft – in part because they provide easier access to shipping containers that thieves use to send stolen cars out of the country for sale on the international black market.
Dealerships see more sophisticated theft schemes
Senior Claims Customer Service Executive Mark Mikesell works with Zurich’s mega-dealer customers to help them understand and mitigate loss from auto theft. “Personal cars are usually stolen by small-time thieves for joy-riding or to commit other crimes,” he explains. “But robbers who are targeting auto dealers are increasingly sophisticated. One customer recently sustained a $1M dollar loss of 14 stolen vehicles in a meticulously planned theft. We saw it all on surveillance video afterwards, but by that point, the cars were gone."
Mark continued, “The most common tactics for thieves targeting car dealers include breaking into the dealership office and grabbing keys if they are not well managed and secured. They also execute tactics such as key swapping during test drives that aren’t accompanied by a dealer salesperson or relay theft which is tricking the keyless entry system in order to digitally steal a vehicle. We also see ‘false pretense purchases’ -- the most common example of which is identity fraud.”
Mark Stevenson, General Manager, ValMark Chevrolet, said, “For the past 5 or 6 years, we had armed police on site and they patrolled the property through the night, but it was very expensive and we still had 3 thefts while they were on duty. Security professionals can’t be in all places at all times and we still had incidents of theft from areas that were unattended. We also know that thieves are casing dealerships, observing security measures and habits of personnel. And they are opportunistic. We’ve seen catalytic converter and tire and wheel ‘take-offs’ during the day when our personnel are otherwise occupied with customers, their work, or are in a different part of the facility.”
Making a concerted effort against theft
Daryl says, “There are many steps dealerships can take to protect their inventory from predators. Layered security, burglar alarms on all buildings and a key control system for secure storage are Gates and locks in the lots, perimeter fencing, landscaping features and active video monitoring services that allow someone to interrupt thieves while they are in the act by talking to them are a strong deterrent.”
Mark Stevenson explains, “We added a key control system and a sophisticated security camera solution. For key control we use the Keeper System. It requires a thumb print/thumb scan for salespeople so no one can use anyone else’s code. The system lets us know which keys are out, who checked them out and when, how many times the vehicle has been shown, the full history. It also provides a report each night before close. All keys must be checked back in at the end of the day.
We also put an active camera and monitoring system in place. We have 64, 4K cameras with facial recognition throughout the property. If a person walks around the entire dealership, the software follows them throughout the property and records their activity. We have license plate readers at every entrance. We scan the license plate of every vehicle that has access to any part of our property. We installed cameras with license plate readers on two adjacent properties so we can track activity approaching the property. So we have their activity recorded for the duration of their time in the dealership. If there should be an incident, we can pull the plate information, video footage and time stamp."
Since installing this system we’ve had two thefts. The system identified the individuals immediately, the police used the information to locate them and recovered the property, in one incident the property was recovered the same day. We had never been able to do that in all our years with security guards because we had no way to track individuals or identify vehicles used for the crime.
The security camera system has also given us the added benefit of access to video relating to slip and falls. We did have someone trip and fall on the property and were worried something on the floor might have caused the fall, we went back to the video and were able to see that the customer just tripped while getting out of her car. In the past, we almost always took responsibility for these types of incidents because we really couldn’t be sure what happened. We also had an altercation that involved an employee, again we were able to see what transpired. Our employees know that we have 24/7 video monitoring, so the system provides an added measure of security for our staff as well. The initial setup of the system is not cheap, but once the hardware is in place, the monthly monitoring costs are less than half of what we had been paying before.”
Daryl adds, “Auto theft is one risk that is top of mind for our auto dealers and one that Zurich is well equipped to help address. Zurich can conduct a focused risk assessment to evaluate site security and provide recommendations to improve overall security.”
Find more auto theft loss prevention tools and resources in the Knowledge Hub at www.zurichna. com/industries/auto/auto-resource-hub
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9 DEALER PRINCIPAL