But all that ostentatious display comes with a downside: The open, welcoming cornucopia of cars is also attractive to thieves. Like Willie Sutton's infamous answer about why he robbed banks–because that's where the money is–thieves might explain that car lots are a target because they can easily take what they want from a densely packed collection. The reasoning is much the same for big-rig truck lots, where the value of massive Peterbilts and Kenworths can easily top $100,000 apiece.
Between rising gas prices and tough financing restrictions, car and truck dealers are struggling for sales and worrying about their bottom line. These tight economic times make it all the more important for them to take precautions to stop the losses associated with theft from their lots.
It isn't just about the cost of the missing car or truck; a track record of theft claims drives up insurance rates and the deductible payment the dealer incurs on theft loss they didn't plan on. Also, the time and energy spent dealing with theft reports and police investigations could be better spent prospecting for more business.
Brokers and agents who are sensitive to the challenges facing dealerships can use knowledge of preventive measures which can be taken to cement relationships with current customers or to make headway in a competitive match for new business. By providing effective risk control advice, you can demonstrate to your dealership customers that you are a value-added resource, not just an insurance salesperson who comes around once a year to collect premiums.
Targets of theft
Understanding the pain points for car and truck dealerships is an important first step to presenting yourself as a knowledgeable expert. While stolen vehicle statistics and anecdotal evidence indicate that most cars are taken from the streets and most trucks are hijacked en route for the value of their cargo, dealerships have to contend with theft "hot spots" that may apply to their specific circumstances. These include:
o Luxury cars. From the thief's perspective, it takes about the same effort to steal a Lexus as it does to steal a Ford Focus from a new or used car lot. Since the successful thief can get a much better price for the more expensive Lexus, it isn't surprising that luxury-brand cars are more targeted on dealership lots. In addition, demand is heavy for Lexus, Mercedes and BMW brand cars on the black market, giving thieves more outlets for unloading their stolen goods.
o Border areas. While it would be an exaggeration to argue that dealerships are suffering from rampant theft throughout the United States, there are definite higher-risk areas where lot thefts are more likely to occur. For example, in San Diego and border towns in Arizona, thieves may see more opportunity to dump their stolen goods for a profit by quickly moving them from the United States into Mexico.
o Catalytic converters. Within the past year, thieves have become interested in catalytic converters because of the rise in the price of the precious metals used in their production. According to USA Today, platinum traded for about $608 per troy ounce and palladium was bringing $208 five years ago. More recently, platinum has climbed to $2,083 per troy ounce and to $468 for palladium. While a thief can expect to receive only $50 to $100 at a scrap yard for each catalytic converter, the appeal is that they can be stolen easily and quickly–especially in areas where cars are packed together in large numbers. The Los Angeles Times estimates a thief with a socket ratchet can take about 90 seconds to remove a catalytic converter. High-clearance vehicles like SUVs and trucks allow a thief to quickly roll under, unbolt the converter and roll on to the next vehicle. One used car dealership in Peoria, Ill., reported 20 stolen in one night.
o High-end wheels. Other parts that can be easily separated from cars are specialty wheels and rims, which may be worth $1,000 or more apiece. As with catalytic converters, the thief may walk away with lower compensation than for a whole car, but the advantage is that a large number of wheels can be removed quickly, securely hidden and transported to a buyer with less chance of discovery.
While the above categories represent the most frequent dealership theft problems, no car lot is immune. Various news sources over the past few months have reported dealerships suffering thefts that had none of the usual characteristics. In April, one used car lot in Raleigh, N.C. reported the overnight disappearance of 23 vehicles. In August, a total of 11 cars were taken from a Honda dealership in Mentor, Ohio, in two incidents over the course of a week. And in June in Modesto, Calif.–listed by the National Insurance Crime Bureau as having the highest per capita car-theft rate in 2007–a used-car lot owner complained that three cars were stolen shortly after he opened his business.
Ways to discourage thieves
Thieves have a number of strategies for getting away with cars from a dealership or used car lot. They can employ brute force, using bolt cutters to take out chains and fences, trucks to ram barriers blocking entrances, or other tools to knock holes in cinderblock walls. Their focus may be on hot-wiring cars to get them moving, or their target may be the peg board loaded with dangling keys that many car lots keep in a backroom.
If brawn isn't their style, thieves can try more brainy approaches, such as posing as potential buyers. In this scenario, they may do something simple, like steal the key as they leave the car after a test drive, or search the glove compartment for the plastic passkey that is often stowed there. They may even go for a test drive and never return. Or their gambit may be more complicated: driving to a locksmith during a test drive to get a duplicate key made, or using an accomplice to distract the salesman's attention while they make an impression of the key for later duplication.
One story widely circulated on the Internet describes a sophisticated car theft ring in Atlanta that copied down vehicle identification numbers from vehicles on used car lots, faked registration papers for each, and convinced dealerships to create new keys for cars the thieves supposedly owned. Then they returned to the used car lots at night and drove the cars away.
Most thieves, wanting a fast return on their efforts, go to much less work. Steps that a dealership can take to interfere with a thief's plans can range from the basic and inexpensive to the sophisticated and more costly. By sharing the following menu of options with your customers, you can help them organize a strong defense against thieves.
1. Establishing protective policies and practices.
Dealerships and used car lots should establish anti-theft policies and practices and then ensure that each employee is trained and held accountable for following the policies. For example, no test drives should be allowed unless an employee accompanies the potential buyer. In addition, driver's license information should be validated, copied and retained for each person who test drives a car; this could be useful information if a car is stolen later.
It is also important for car dealerships to perform frequent and regular inventories of their vehicles. Owners of large lots in particular, with many vehicles that are constantly being moved from one part of the lot to another, may not notice immediately when cars are gone, or may have little idea of when a car was last seen on the lot. Careful inventory practices are helpful during the investigation that follows a theft.
2. Scaring them away.

The best defense is to convince thieves that it would be easier to steal from someone else. A well-lighted lot is less attractive to a thief, and additional spot floodlights powered by motion sensors can startle a thief in mid-job. More expensive but also more effective options are to hire security guards who regularly patrol the lot or to invest in video surveillance systems. These security measures can be described on signs at strategic points around a lot to aid in discouraging thieves from thinking a lot is an effortless target.
3. Taking control.

Setting up a key control system is one way to lessen the chance for spontaneous thefts. Electronically controlled box systems can track who checks out each key and stop employees or others from removing more than one key at a time. Even securing the old peg board system within a strong box that is under lock and key is an improvement over having a completely open system.
Lot owners can also invest in individual electronic monitoring for each car. These systems can aid in the recovery of a stolen vehicle by sending radio transmissions about its location. Other solutions include systems that shut off fuel lines or disengage ignition systems unless the driver turns a hidden switch or has a special overriding device, options that are sometimes used by lots that offer big rigs for sale.
4. Knowing what not to do.

For enclosed lots, some owners may consider stationing guard dogs where they can range freely among the cars. As an insurance expert, however, you should warn owners away from this approach. Dogs add a layer of potential risk and liability–think bites and other injuries that may be inflicted–and they actually may make the lot uninsurable with many companies.
Finally, as an advocate for your customer, help them understand how improving security will affect their insurance premiums. Most underwriters look back at five years of loss records to determine the insurability of a car lot. Rates and deductibles are much higher for those who have a record of frequent, expensive claims. But by building the case that specific security measures have been implemented, and by demonstrating improvement in claim activity, a customer can lower insurance costs.
No car lot owner wants to deal with the aftermath of theft. Police investigations take time and require cooperation; insurance claims often involve a trail of paperwork that most would like to avoid. By helping dealerships and used car lot owners become proactive about security, you can strengthen your relationship with customers as an expert who is focused on lowering the likelihood of theft and saving them money.

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