Team VADA eViews
The Digital Newsletter of Your Virginia Automobile Dealers Association
March 2008
-
Reporting a vehicle stolen that wasn’t actually stolen can create huge headaches and losses for the dealership
-
Do your homework carefully, but quickly, before contacting the police
-
Have a procedure in place to follow when it appears a vehicle is stolen
Your floorplan source does an inventory check, a car comes up missing, and you immediately report it stolen. Should you be so hasty?
The local authorities to whom you report it stolen place the car into the national database for stolen vehicles, NCIC. Your insurance company starts processing the claim and creates a reserve for the loss. Then, you find out the car was actually sold – in a really awkward way. You receive a call from the police. The customer who bought the car was picked up for driving a stolen vehicle and is sitting in jail. It turns out the paperwork got hung up in the F&I office and just “fell through the cracks”. Now what do you do?
Quite clearly, you take the steps necessary to get the customer out of jail. But that’s not going to solve the fact that the car is still listed as stolen in NCIC, you’ve got a prosecutor who has commenced papering a case who will be aggravated about having to do so, you have local police who are upset that they had to take their time to arrest and process someone who simply bought a car, and you’ve got an insurance company with a loss reserve sitting on its books that it is probably not going to release until they know whether or not you are going to renew with them. And, worst of all, you’re probably going to have to open your checkbook to write a rather sizeable settlement check for the person who spent a night in jail just for being one of your customers. Could all of this been avoided?
A dealer must recognize that reporting a vehicle as stolen is a serious decision. Once the report is made, many wheels start turning. And if the car really is not stolen, there can be some serious consequences.
Does your dealership have a stolen car policy? If not, here are some critical elements to consider.
-
Make sure the car really is stolen. When you see a thief drive off in a car, that’s an easy call. However, if a car simply shows up missing after an inventory, that should not be the end of the inquiry. Investigate carefully. Was it delivered? Was it DXd? Was it wholesaled? Did an employee change demos without proper notification? There are a variety of explanations as to why cars go missing in a dealership, and the dealership should investigate them all before making a stolen car report.
-
If a car is stolen, prosecute vigorously when the thief is caught. Nothing angers police and prosecutors more than to go through the work of arresting and commencing prosecution of a car thief, only to have the dealership fail to cooperate in the prosecution. Police departments and prosecutors do not want to be a dealer’s recovery agents. If they think a dealership is treating them that way, they will stop taking the dealership’s stolen car reports.
-
If a vehicle turns up and is not stolen, make sure law enforcement knows immediately. Every stolen car goes into NCIC. It will stay there until someone takes it out of NCIC. If the police are not notified that a car is recovered, you run the risk of having the legitimate customer, who gets stopped for a speeding ticket, or a broken tail light, get arrested as a car thief. Nothing ruins a customer’s willingness to give a dealership a top box score on a CSI survey like a night in jail. And, few lawsuits are as expensive for a dealership.
-
Notify the insurance company. If you recover a vehicle, notify the insurance company. If they have paid the dealership for the vehicle, the money either needs to be refunded or the insurance company has the right to the vehicle. If you have not been paid for the vehicle, you want to make sure the loss reserve is relieved so that when you are next pricing your garage insurance, the vehicle does not show as a loss that will increase premium.