Dealership crime is on the rise, with auto thefts increasing by 50% in Ontario during 2022.1 Your dealership is susceptible to inventory theft, third-party property damage and vehicle collisions, especially with high-value inventory parked outside for public display or on the road for test drives. The responsibility to keep your assets safe shouldn't rest only on the key persons or managers at the dealership, but on all employees who engage with customers and the vehicles.
Before a loss occurs, consider the following to protect your inventory.
1. Install live monitoring
The loss. Overnight at a new car dealership, thieves cut through the dealer's chain-link fence with a reciprocating saw, broke into high-valued Jeeps with key module replication devices and drove then away through the opening in the fence.
Through security and camera systems, the dealer was alerted shortly after break-in and quickly contacted the police. Two of the three stolen vehicles were recovered the same day. The thieves were apprehended and face criminal charges.
Including the property damages to the fence, the dealer incurred $89,000 in losses.
Our advice. We recommended using on-site video protection and surveillance with 24/7/365 live monitoring with direct communication to dealership management and local police services.
2. Install theft recovery systems in inventory
The loss. A dealership's general manager received a Dodge Ram 1500 (number two on the most stolen list1) as a company car. The truck was stolen from the employee's driveway overnight. The employee had both key fobs, so it's suspected that the thief used either forced entry or a key fob replication device. No GPS recovery system was installed in the truck, and the dealer suffered a $76,000 loss.
Our advice. Install recovery systems in vehicles, prioritizing high-value, test-drive and demo vehicles.
3. Closely manage demonstration and company vehicles
The loss. A customer requested a test drive for a high-value BMW. The salesperson handed the customer the key before getting into the car to accompany the customer on the test drive. Within seconds, the customer got into the vehicle, locked the doors and drove away. The vehicle was stolen, valued at $77,000.
Our advice. Closely manage demonstration and company vehicles provided to employees and prioritize the safety of high valued vehicles provided to staff. Consider implementing faraday bags or boxes for all vehicle key-fob storage.
4. Prevent catalytic converter thefts
The loss. A truck repair centre was storing customer's trucks in an open parking lot that was unfenced with limited security. Catalytic converters were stolen from 77 Ford and Dodge trucks. Averaging over $8,000 to replace each converter, the repair centre incurred $635,000 in losses.
Our advice. To reduce the risk of catalytic converter thefts, use security measures such as fences, blockades, fully lit premises and strategic parking of high-value or targeted inventory.
5. Watch for cyber crime
The loss. A Canadian dealership was sourcing a vehicle through a supplier in the US. The team received a copy of the invoice attached to an email, and approximately 20 minutes later, received a new invoice attached to the same email string, appearing to come from the same person with revised banking information advising that the funds would be released faster through this method.
Thinking the US$49,000 request was legitimate, the funds were transferred. Upon collecting the vehicle, the vendor requested payment of the outstanding invoice. The dealer had been the victim of a social engineering attack. Too much time had elapsed since the wire to recover the fund, leaving the dealer to pay out of pocket.
Our advice. Cyber criminals are becoming increasingly sophisticated in their attempts to exploit supply chain vulnerabilities. Remain vigilant.
Gallagher's DealerSure program
The Gallagher Automotive and Dealerships practice delivers dealership coverage through the DealerSure program, which encompasses a spectrum of automotive businesses including multinational franchised and local non-franchised dealerships. We're specialists focused on arranging individual insurance coverage that reflects the needs of dealerships.
Gallagher understands that each dealership has different needs, and we take the time to understand the intricate details of your business, enabling us to identify risk where others may not. Regardless of your dealership size or location across Canada, we will place the best coverage that works for you.