As originally appeared in Autosphere on August 13, 2024
Author: Huw Evans
Dealers are looking at innovative solutions to combat vehicle theft and protect themselves and their customers.
There’s no getting around it. Auto theft is a serious problem in Canada today. Since 2018 Auto Theft Claims have increased by a whopping 254%.
To provide perspective on just how significant this is, in 2022 [according to data from the Insurance Bureau of Canada] a total of $1.2 billion was paid out in claims related to stolen vehicles (three times more than just four years previously). And this is having a major impact, not only for insurers but also consumers and dealers.
Luxury impact
Jake Stacey, Executive Vice President of Sales and Training at LGM Financial Services, notes that for dealers specifically, there are several issues that are impacting their business. The first is consumers shying away from specific vehicles, such as luxury SUVs (which are popular targets for thieves). This is particularly being felt on the leasing side which is where most of the luxury vehicle volume is. “Leasing a luxury SUV has [traditionally] been a great way to get into a certain price point for many consumers,” says Stacey, but today, with the publicity surrounding auto theft and consumers wary of leasing or purchasing them it’s presenting a difficult situation, since OEMs still want the volume, but dealers are finding it harder to move metal off their lots.
Another factor impacting this, are increases in insurance premiums as carriers take on more risk in insuring these types of vehicles. The increase in premiums is being particularly felt on the leasing side, when in the past, notes Stacey, that generally wasn’t the case.
“We’re seeing significant pushback on allocation,” explains Stacey, not only because demand is down for these types of vehicles due to public awareness regarding theft after purchase or leasing, but also because these vehicles are getting stolen off dealer lots before they are even sold.
Allocation and property
Dealerships are also being broken into, with thefts even being seen in the parts department, including equipment and tires. “When you look at the loss ratio for a dealer and the increase in their own insurance costs, not just on the allocation side, but on their property side, it’s creating a friction point between OEMs and dealers in a way that we didn’t think we would ever see,” Stacey explains.”
Another issue complicating the matter is that if the vehicle is at the customer’s home and is targeted and stolen there, the risk that the thieves will also break into the property to get the keys and steal valuables inside the house, is also posing a big problem, particularly since many insurance coverages don’t protect against these types of thefts.
Finding a solution
Yet wherever there is a problem, there is also a solution. On the vehicle theft side, Brent Ravelle, President of the Ravelle Group of Companies, which owns and operates multiple dealerships in Ontario, says that after a couple of years of having to deal with heavy theft from his own lots, sought out a solution that not only protected his businesses but also his customers.
“I was able to find a North America-wide product that not only has a fully capable lot management tool, but more importantly, moves on to the consumer, allowing them to manage their vehicle and communicate with the dealer, in the advent of a drivability or safety issue.” As a result, the dealer is notified of the problem right away, enabling them to reach out to the customer and get the issue dealt with quickly and efficiently.
This led to the creation of RGC Automotive Services and the introduction of CarRX by Elo GPS to the Canadian marketplace. Not only does CarRX help improve customer service and boost loyalty and retention, but it also enables dealers to protect their lot inventory from theft and instantly locate, and recover missing or stolen inventory anywhere in Canada or the U.S.
Digital token
According to Todd Kendrick, Director, Sales and Products at RGC Automotive Services, a big advantage to CarRX is that it uses a digital token system so that law enforcement can directly track the vehicle in real time, enabling a much higher rate of recovery. Furthermore, strict Canadian privacy laws were critical when bringing the tool to Canada and it can only be sold and installed at the dealership. “You cannot renew the device unless you go back to the dealer,” explains Kendrick. “It’s aired to the vehicle’s VIN number, that we only give to the customer on a wireless device, via a stolen vehicle recovery app. There is nothing else tied to it.”
From an F&I perspective, such products are proving to be of great reassurance for customers as well as a great solution for dealers that offer them.
Sym-Tech Dealer Services, which provides a whole host of F&I products and solutions for dealers, has partnered with RGC to offer Elo GPS tracking to Sym-Tech’s dealer customers in Ontario, Quebec and other jurisdictions in Canada.
Multiple benefits
Derek Sloan, President of Sym-Tech, notes that there are multiple benefits to a product like this. “It can be installed non-intrusively in the vehicle,” he says and besides enabling dealers to locate vehicles on their lot and access valuable data such as battery health and fuel levels, it also enables them to set geofencing, that will alert them when a vehicle has moved. Additionally, if a vehicle is stolen and not recovered, the dealer is eligible for a theft reimbursement benefit to help cover the replacement costs, explains Sloan. “These benefits are extended to the consumer when they purchase the vehicle, making this solution that’s valuable to both dealers and customers.”
Furthermore, notes Sloan, dealers have an added advantage in the F&I space in that they can use virtual showrooms and interactive demos to show customers how these products work and their benefits. “Online platforms make it easy for customers to compare products, read reviews, and make informed choices,” he says. “These digital tools also streamline the process, making it easier for customers to add these protections when buying a vehicle.” He notes that Sym-Tech’s daveplus offers advanced mobile device solutions, “giving dealers the flexibility to add F&I products at any point throughout the sales process—from the passenger seat on the test drive, to the physical delivery of the vehicle.”
