Car dealerships face a wide variety of security threats and are particularly susceptible to theft and property damage, particularly with high-value inventory left outside for public display. Although car dealerships experience the same security breaches as other retailers, many of their challenges are completely unique to their industry.
The theft of high-end luxury vehicles is becoming a serious problem at dealerships. The automotive dealerships industry estimates that it has lost $223 million nationwide in connection with car theft rings, including $5.7 million in DuPage County alone.
Security Challenges Faced by Car Dealerships
The auto industry is worth an estimated $2 trillion and continues to grow each year. But with this increase in revenues comes an increased risk of crime, and the theft of vehicles and vehicle parts is most definitely on the rise.
Due to short supply and heavy demand due to disruptions from the Covid pandemic, vehicles are particularly valuable commodities these days. Reports from the National Insurance Crime Bureau show an unprecedented surge in auto thefts across the country over the past two years, with the biggest jump in car thefts right here in Chicago: car thefts increased by a staggering 134% in 2020. Although theft figures are beginning to level out as pandemic restrictions lift, statistics remain disturbingly high.
Common Threats to Car Dealership Security
One of the most significant challenges in auto dealership security is allowing easy access to potential customers while protecting valuable assets from criminal activity. Car dealerships offer a world of opportunity to experienced thieves. Unfortunately, theft is far from the only threat of financial loss and reputation damage for dealerships.
Successful criminals will study auto dealership routines and often choose the busiest times to strike, allowing them to disappear within the hustle and bustle. The threats listed below are only a handful of the many ways that criminals can cause a significant detriment to a dealership’s bottom line and reputation.
Chicago is currently facing a rash of thefts from car dealerships across the city. Over the past year alone, Chicago auto dealers have reported losses in the millions of dollars from sophisticated heists targeting their lots, a threat which continues to be a problem for both car dealers and law enforcement. Surveillance video footage shows that car thieves are brazen, organized, and capable of operating quickly. Earlier in 2021, several people stole 15 luxury vehicles within minutes from a dealership at a $1 million loss.
Catalytic Converter Theft
Not all vehicle theft involves stealing the entire vehicle. Many criminals today are also invested in stealing valuable parts, which can easily be hoisted over a gate.
One of the most costly crimes executed on dealership properties involves catalytic converter theft, which can be challenging to identify and stop. Armed with an array of tools and techniques, thieves are becoming faster and more sophisticated in their pursuit of catalytic converters. Because removing the catalytic converter won’t disable the vehicle, it’s unlikely that the theft will be noticed until the impacted vehicle is started or driven. While thieves will cash in stolen converters at recycling facilities for a couple hundred dollars per converter, each converter can cost the vehicle’s owner thousands of dollars to replace. This is an enormous cost for any auto dealer, particularly when a customer’s vehicle is targeted and must be kept for additional repairs.
Unique vehicle identification numbers (VINs) are increasingly being used in a car theft scam known as VIN switching. A vehicle’s VIN number – etched on labels that are intended to be permanently affixed to the car – is the most reliable way of accurately tracing the vehicle’s history and title ownership. Without the VIN, a car has no ‘identity’. Criminals use various methods to swap VINs, including scams commonly referred to as Strip & Run, Salvage Switch, and VIN cloning.
Compared with other scams, VIN switching is relatively uncommon. However, reports show that not only are incidents are increasing but that the crime has flown below the radar of consumer watch groups. Victims are usually left helpless to do anything about it, and VIN-switched vehicles have been sold by unsuspecting auto dealers. Oftentimes, the crime only comes to light when car theft rings are busted by law enforcement and their activities are thoroughly investigated.
Customer Identity Fraud
Vehicular theft rings that utilize fake identities to steal luxury vehicles from dealerships have captured recent headlines across Chicago. In September of 2021, a multi-state car theft ring based in Chicago used stolen and fraudulent identities to defraud car dealerships and financial institutions, setting up financing for high-end vehicles. The conspiracy resulted in losses totaling over $100,000 for dealerships and financing companies in Chicago.
Many newer model vehicles feature keyless entry systems that allow the driver to unlock and start their car without keys when a fob is within range. While convenient for drivers, keyless entry systems have created new opportunities for theft. Criminals have developed cloning devices that can intercept the signal from the smart key so it appears to the vehicle that a key is present. For safety reasons, the engine won’t cut out when this key is out of range. The entire process can take as little as 60 seconds. Thieves are using the relay theft method to steal vehicles from driveways as well as dealerships.
Theft Prevention Strategies for Chicago Car Dealerships
Given the range of security issues facing auto dealerships, it’s critical that car dealers are aware of threats and implement reliable solutions to protect their valuable inventory and customers.
The FBI estimates that nearly $6 billion worth of vehicles are stolen each year. Without the proper car dealership security systems in place, your dealership could be next. Auto dealerships must implement multiple layers of security designed to be proactive in nature and prevent criminal activity before it starts.
Blue Star Security’s highly experienced team of law enforcement officers works closely with auto dealerships to provide customized security solutions tailored to their needs. Committed to delivering unparalleled solutions for loss prevention and inventory protection, our team is skilled in assessing security issues and mitigating threats before they start. Car dealers invest far too much money into their inventory for security to be an afterthought.
In our post-pandemic world, implementing security strategies is invaluable to your dealership’s lot and assets.