Car thefts surged to new levels in 2020 as most of the world dealt with the global pandemic and resulting economic impacts. Unfortunately, 2021 hasn’t fared much better for auto theft statistics, though the drivers have changed. In 2020, auto thefts increased by almost 10 percent compared to the previous year according to the National Insurance Crime Bureau (NICB) and 2021 saw a new problem. Before digging into that, it’s important to understand how the industry got here.
The root factors behind a number of trends can be traced largely to the pandemic impacting our economy. It’s the cause of systemic problems driving increased auto theft. It began with OEMs not having enough employees to work shifts or impacting schedules. Without employees to build up inventory, they produced fewer cars and auto parts. With fewer parts available to keep up with quickly returning demand, the law of supply and demand points to why automotive parts and cars sell for a premium in the current market.
Among other impacts, the crisis resulted in supply falling amid economic stimulus and programs that, after some uncertainty, drove up demand. With more households adopting a two vs. one car stance, the decrease in ride shares and public transit usage, as well as the stimulus programs, the auto industry saw a surge in sales and faster recovery than other sectors of the market. Since there wasn’t enough supply to meet these demand factors, the products grew more expensive. This turned dealerships and parking lots into a bigger target for thieves looking for a quick return.
Shortage of Automotive Inventory
Many dealerships have struggled to maintain optimal inventory levels more than they have in the past. One cause of this is the semiconductor chip shortage impacting the supply chain. This initiated a domino effect on the auto industry’s supply chain. Chips aren’t the only thing in the auto industry that are causing a shortage.
Moreover, many parts on new autos have increased value in the market. When the value of something increases, it makes it more attractive to thieves. With thieves stealing high-value car parts, customers are struggling to get replacements because of the shortage.
Supply chain problems, shortages, and the sharp rise in auto parts theft have created a perfect storm for the industry. One particular part that is getting notable attention has a shortage and is reselling at historically high prices.
The High Price of Catalytic Converters
The part that sells for a lot of money is the catalytic converter. Another NICB article tells the tale of catalytic converter theft skyrocketing. In 2018, there were only 1,298 catalytic converter thefts reported. That number soared to 14,433 in 2020!
The reasons a criminal will target catalytic converters is because the process is simple, low-risk, and has a high reward with an easy way to cash in. All they have to do is crawl under the vehicle and cut off the converter. That’s all it takes to remove the precious metals attached to the exhaust. Crooks can do it within one to two minutes and then easily sell to readily accessible scrap and recycling yards. So, they’ll crawl under vehicle after vehicle grabbing as many as they can.
As you know, there are precious metals like gold, platinum, rhodium, and palladium in catalytic converters. J.D. Power reveals platinum brings in a little over $1,100 per ounce, palladium goes for more than $2,000, and gold can yield about $2,000. Thieves who luck out with rhodium will be able to get anywhere from $10k to $21k per ounce!
Catalytic converters are not easy to replace. Remember there’s a shortage of auto parts. Catalytic converter replacements are hard to obtain. Searching for a replacement is not the only problem.
Sloppy thieves can damage the vehicle’s fuel line or wiring in the process of stealing the converter. When this happens, the vehicle becomes unsafe to drive and the cost of repairs goes through the roof. Not only could the vehicle need a new catalytic converter, but also wire and fuel line repairs.
How Dealerships Can Protect Their Assets
With the increase in theft and vandalism comes a need for the best security system that meets the needs of automotive dealerships. A traditional dealership security system will not suffice against these new threats. By the time the security system notices it, the suspects are long gone. That’s because these traditional security systems tend to be reactive rather than proactive.
Sometimes these security systems don’t catch anything. It’s not until the manager or whoever arrives at the dealership first thing the next day will see the damage the lawbreakers left behind.
A dealership’s most precious assets cannot be locked away in the building. As a dealership works to compete in their respective markets, they display their inventory to attract prospective buyers..
The industry needs a robust security system that will help deter theft, monitor employee activities, and increase productivity. Yes, a security system can actually enhance productivity. An effective proactive security system needs to have multiple layers built in. This way if one layer is broken, it still has other layers protecting the business.
That said, the best modern security system for automotive dealerships is an integrated approach to security that combines remote video surveillance, video analytics, and an access control system. This trifecta takes a proactive approach to security. What makes this so effective is that video analytics coupled with intelligence and trained monitoring operators put two different types of eyes across your entire property: computer intelligence and human decisioning. This partnership allows them to help catch a potential problem before anything happens.
Pairing access control with video surveillance makes it possible to search for events that happened at a certain time. Access control records the time someone enters a room. And that information can speed up the search for the video.
How the Best Security System Can Pay Dividends
Remote video surveillance with video analytics and an integrated access control system offers many advantages that aren’t available in other security systems. Additionally, you’ll help maximize your security investment that could result in a fast ROI compared to other security solutions.
An integrated security system helps increase efficiencies and can enhance your customer service. Integrated security combines some or all the following:
- Video monitoring
- Video review and analysis
- Access control
- Audio warning speakers
The dealership’s security solution you choose will depend on your property and how your business operates. When making this important decision, consider bringing in a video surveillance company’s security adviser. The adviser can do an evaluation of your business and property to provide you with recommendations that fit your requirements and budget as well as leverage the best-in-class analytics and monitoring practices that a local integrator may not have.
After you approve, a trained security expert can implement the security system with remote video surveillance. The process involves placing security cameras in strategic locations around the dealership. Video analytics help the security monitoring center detect potential problems and react quickly to secure your site. When the alarm is triggered by a specific scenario, it notifies the trained monitoring operator who takes action.
The operator monitors your dealership from another location. The person can warn intruders on an audio speaker and contact law enforcement while following the criminals’ movements if they do not comply.
Unfortunately, employee theft is also a problem. Additionally, video surveillance can help reduce your risk of internal theft. Employees can’t hide from the cameras, and they can’t get help from the operator to do an inside job. That’s one of the many advantages of the remote monitoring system as the alarms and alerts are randomly sent to operators to eliminate potential collusion.
Video surveillance can also help protect your dealership from false claims – both customer and employee based. When customers bring in their vehicles for maintenance or servicing, they may claim the dealership damaged their car. Remote video surveillance captures everything on digital recordings to help protect or validate those claims.
If a customer claims the service team broke something, video analysts can search the footage to show you what actually happened like in this liability claim against a dealership. It’s very hard to win liability claims without evidence. Video surveillance with video analytics takes care of that for you.
Catalytic converter thefts are escalating at an astronomical rate. It’s creating problems for automotive dealerships. When you work with a company like Stealth Monitoring, you’ll be able to tap into innovative security solutions and minds.
Wondering how it helps increase productivity? Stealth’s clients have seen productivity improve because management works with Stealth’s team to review how salespeople and customers move around the lot and engage. The analysts can find gaps and management closes those gaps. This can help cut customer wait time while boosting service and operations.
Your dealership may save on costs because video surveillance can save up to 60 percent on your security spend. The average customer sees an ROI within four months.
The best security system for dealerships isn’t the same as the best one for construction, retail, or any other industry. Optimizing your security investment requires working with a company that has experience designing security systems for dealerships. To learn more about dealership security, pick up this guide to four auto dealership theft trends. Please feel free to contact us with your questions.