Auto dealerships are seeing more vehicles stolen while being transported, a worrying trend that’s causing headaches for dealers and insurers alike. With supply shortages pushing dealers to find cars in new places, criminals are taking advantage of gaps in the shipping process to snatch vehicles before they reach their destination.
Matt Cermak, senior vice president at DealerGuard, which manages insurance for dealerships, shared that in the past year alone, the company has paid out nearly a dozen claims related to stolen cars during transit. He describes this spike in thefts as a “loss epidemic,” a problem felt across many insurance programs.
The shift in how dealers get their cars is part of the issue. Instead of just buying from manufacturers or auctions, many now source vehicles from individual sellers, small auctions, and brokers, especially with the disruptions caused by the COVID-19 pandemic. Car prices have jumped sharply—by 25 to 30 percent—and rare models are even harder to find. To meet demand, dealers often rely on third-party transport services over long distances, sometimes hiring drivers through online platforms without fully vetting them.
John Taggart, another senior vice president at DealerGuard, explains that this reliance on unvetted logistics providers opens the door for thieves. Scammers use fake paperwork, impersonations, and even cloned websites that look like real transport platforms to hijack shipments. In one instance, a fake version of a well-known dispatch site was set up, and drivers were misled by changed delivery instructions, unknowingly handing over the cars to crooks.
Some scams are simpler yet effective, like changing drop-off locations, stealing gate passes by hacking auctions, or showing up early with fake IDs to pick up vehicles. Rising car values and better technology only make it easier and more worthwhile for thieves.
The effects on dealerships are serious. Cars lost in transit often cost between $50,000 and $500,000. Even a single theft claim can raise insurance costs or deductibles for dealers, while repeated losses can make it extremely tough to get coverage. Insurance policies usually cover these thefts, but high deductibles and unclear terms can create difficulties. Some insurers increase deductibles after each theft, making claims more expensive over time.
As vehicles become scarcer and more valuable, and dealers depend more on non-traditional supply chains, the risk of theft keeps rising. According to Taggart, when losses reach around $250,000, insurance carriers might only offer coverage with heavy deductibles, pushing some situations close to being uninsurable. Beyond money, multiple thefts hurt a dealership’s reputation, shaking customer trust even if the dealer eventually replaces the car.
DealerGuard urges dealers and their insurance agents to take extra care. The advice is simple: avoid shipping cars when possible since crossing state lines ups the risk; thoroughly check anyone hired to transport vehicles; and stick to trustworthy platforms, but still verify every detail. Using apps with GPS tracking can help keep an eye on vehicles in transit.
DealerGuard is also stepping up by sending out advice, updating their policies, and visiting dealerships to suggest ways to reduce the risk of theft. The goal is to keep dealers aware and prepared at every stage of their insurance coverage.
This rise in transit thefts shows how changes in how cars are bought and moved can bring new problems. It’s a reminder that dealers need to be vigilant and smart about protecting their valuable inventory while insurers work to adapt to these new challenges.