|By now, you may have heard that there is a new theft risk for auto dealers. While there have always been concerns with key control and theft of vehicles, today there is a new hot item on the lot: catalytic converters. If dealers do not move their inventory on a regular basis, they may not realize the converter is gone until the car is taken on a test drive, which might result in a lost sale and quite possibly a lost customer.
Why the draw to converters? Two reasons: low risk and high reward. They can be quickly and easily removed, and the thief can work undetected while lying under the vehicle. In addition, thieves no longer have to steal the entire car for a nice payday. The majority of converters manufactured today contain three precious metals: platinum, rhodium and palladium. Precious metal recyclers want the platinum, which as of October 13, 2008, was valued at $1,019 per ounce, according to Kitco.com. An Edmunds.com article entitled, “In Under Two Minutes: Catalytic Converter Theft” stated, “… thieves can sell converters to metal recyclers for $20-$200” per converter, depending on the type and amount of metal used.
Who are the offenders and where are these thefts taking place? Most of the larger thefts (multiple vehicles hit in a single night) appear to be committed by theft rings. These thefts appear to be occurring all over the country. A January 2008 consumer alert on Consumer News Weekly warned consumers of catalytic converter theft, citing incidents from Los Angeles to Washington, D.C.
Thieves seem to be targeting victims by staking out or casing a dealership lot looking for security, guards, fences, lighting and locations of vehicles. Once thieves decide where and when to strike, they move in and work in teams of as few as two to as many as seven or more. A typical large team of thieves can consist of several individuals under vehicles cutting out converters and a couple more waiting nearby to carry them to a waiting van or truck where two or more are waiting to do the loading.
Target vehicles may include just about any pick-up truck or sport utility vehicle that sits high enough off the ground to allow an individual to slide under it without a jack, and both new and used cars are being targeted. New vehicles that have two converters, such as the Toyota Tundra, can be especially attractive. In addition, there are reports of used cars being targeted even while on the service lot.
When a converter theft is reported, the average claim cost to the insurance company ranges between $2,500 and $3,500 per vehicle. For the dealer, deductibles can range from $500 to $1,000 per vehicle. In addition, some insurance programs do not kick in until a predetermined amount of loss is incurred by the dealer. Therefore, some dealers may end up paying the full replacement cost.
Dealers can help to minimize risk by spending a little time and money to establish the following loss prevention practices:
• Park target vehicles in a well-lit area with a high volume of after-hours traffic, preferably along the very front of the property where thieves are more likely to be seen sliding in and out from under vehicles and hauling away stolen property.
• Eliminate the use of off-premises lots (i.e., mall or department store parking lots down the street) to display target vehicles unless foot security hired by the dealer is present.
• Implement detailed lock-up procedures documenting specific duties for locking gates and fences.
• Research security companies. Select reliable companies with good references and a proven track record. Hire security and watch or limit the number of guards. Request that the security company provide the same guards each night, when possible.
• Install security cameras; working cameras are always the best option. If dummy cameras are used, do not tell employees they are non-working to protect against inside jobs.
• Consider your own employees. Did anyone leave your employment shortly after a theft and/or was hired just before?
Bottom line, catalytic converters can be an easy target and prove very valuable to thieves. Dealers should take caution in where they park targeted vehicles and implement tougher security measures, including dealer-hired security guards and security cameras. These steps can potentially help save dealers thousands of dollars in losses.