Posts Tagged dealer plate theft
Gambling With Your Dealer Plates
Posted by Bernard Boulé in Opinion on April 7th, 2009
“I’ll be back in an hour or so.” He said as he pushed his chair back from the table. “I’m going to run that pickup down to the mall and see if I can find a buyer. I’d sure like to move that thing tonight. If I can that will make three this week.”
“Is it OK if I come along?” She asked.” I could run in to the mall while you work and pick up a few things we need. It won’t take me more than an hour.” While she climbed into the passengers seat he slapped a demo plate on to the tailgate of the late model pickup and they headed to the mall.
“ Having these demo plates from work makes this easy. Without them it would be next to impossible to move these things around. I’m sure glad you were able to get a couple from the dealership.” He said smiling at her.
“ It was easy.” She said smiling back.
We don’t know what went on for the next hour or two. We don’t know what they bought, sold or traded that night. What we do know is that scenarios like the one described above are all too common today. Unlicensed dealers are not only stealing your business they are probably using your equipment in the form of your dealer demo plates to do it.
In conversations with dealers all across the nation I find that a large number of dealers have decided to “protect” themselves by charging their sales personnel large deposits for a demo plates, hoping or perhaps even thinking, that by doing so they are some how making the sales persons responsible for the demo plates. Sadly this is not the case. The dealer remains responsible for all of his demo plates regardless of who has them, when they have them, why they have them, how they got them, or how big a deposit they paid on them.
Unless they have been reported lost or stolen to the appropriate authority you the dealer are responsible for the demo plates and perhaps for any damages that might result from the use of those demo plates.
As a responsible corporate citizen you the dealer owe it to your community, to your dealership, to your family even to your nation to make certain that you know your demo plates are being used in accordance with State and local regulations. You might ask the question.” How can I ever be certain of where and how my demo plates are being used?” The answer of course is to control the demo plates. Once you have control of them then you can manage them. When you can manage them you can know who has them, when they have them, why they have them, even how long they have them. You can even know where they are when they are not being used on dealership business. The best way to get this kind of control is by utilizing a system designed specifically for the purpose, rather than one that has been adapted to it.
By putting off getting a demo plate control system, even for one more day, dealers are gambling with all their dealership’s assets.
Oh! Here they come. It’s 11:00 o’clock. They each have a car, a sporty little ragtop and a mid size SUV, both running on demo plates. Looks like he did some good business tonight. Do you know where your demo plates are?
CPAs Advocate Internal Controls to Reduce Dealership Theft
In a recent post on the blog for Somerset CPAs, the theft of approximately $95,000 dollars from a dealer in the southeast is reported using a simple scheme that went unchecked due to the lack of internal controls at the dealership.
According to our own research:
- It is estimated that internal theft costs employers $9 per employee per day. This amounts to $280,000 a year for dealerships with 100 employees.
- The dealerships that are most vulnerable to this type of theft are those with fewer than 100 employees.
- 50% of all dealers experienced theft during a 5-year period during the 90’s and that percentage has been growing at an alarming 5% annually. This means that the majority of dealers can expect to be victimized by theft of some type every year.
- Reports indicate that 80% of all dealership employees have been involved in some sort of theft from the dealership where they work during the last 5 years.
- Theft or fraud is most likely to occur in departments where cash or other valuable assets are handled but there is significant risk in all departments.
- It is reported that the risk of loss is greater where poor or nonexistent internal controls are in place.
- 95% of all losses paid by insurance carriers results from actions taken by employees.
- $100,000,000 worth of vehicles is stolen from dealerships every year. $50,000,000 worth is recovered and $50,000,000 is paid for by insurance.
- Good loss prevention programs and internal control systems have been proven to halt loss experience growth of 10-15% annually and actually reduce losses by 30%
Theft schemes have been discovered in virtually all departments of dealership operations. The ingenuity of perpetrators is the ONLY limit on the manner in which dealers are being defrauded.
Dealership size isn’t a reliable indicator of the potential risk. Large dealerships with many employees offer a crowd for the dishonest to hide in while small dealerships don’t have the personnel and systems in place to prevent fraud. Theft and fraud rates grow in good economic times because less attention is focused on losses when times are good and they increase in hard economic times because thieves work harder at their craft when the need is the greatest.
You can take steps to reduce your exposure to employee theft by having a risk assessment of your dealership done. Your CPA should be able to provide you with this service, reviewing all aspects of your dealership operations and providing you with an assessment of the risk as well as some recommendations, which should include some type of demo plate control system, for managing and reducing those risks.
Rex Collins of Somerset CPAs also noted that, “dealers should engage a CPA who is familiar with the industry…”. Sometimes the best advice is the most basic.
Flexible Solutions for Dealer Plate Control
Multiple installation options provide a total solution.
Furnishing every salesperson with an never ending supply of tags in order to ensure that the unavailability of a dealer plate does not compromise the continuity of the communication established between a salesperson and their customer. This solution results in the dealership owning far more dealer plates than necessary. The dealer incurs higher acquisition and insurance costs, greater management requirements and added liability exposure. These are issues that managers as well as financial and insurance consultants find troublesome. Securitag eliminates all these problems.
Securitag Unit also available as WM-30
Requiring salespeople to sign dealer plates out and in, which, while reducing the overall number of tags required (a plus for managers, financial and insurance people) interferes with the flow of the sale and requires the time and attention of an employee. Signing tags out and in takes time that should and could be used more productively. Further, this method, as many dealers are finding out when doing dealer plate inventory checks, is not a foolproof system for controlling use and access to dealer plates. Securitag eliminates all these problems.
Charging a large deposit virtually insures that a prompt lost or theft report, which limits the dealer’s liability, is less likely to be made. Until a report is made, the liability associated with that dealer plate remains with the dealer and not the person using or possessing the tag. Prompt reporting of lost or stolen tags is a very big issue with insurance providers. Securitag eliminates all these problems.
The Securitag System has been solving dealer plate access control problems for over twenty years. 2,500 North American dealers agree – Securitag is the best way to control dealer plates.
Is This Dealer Plate One of Yours?
We commonly see cars out on the road using tags that obviously belong to a dealer 3, 4 or 5 states away. Here is a post I found interesting @ www.graymarketcars.com.
Here is a picture of McLaren #068 with dealer plates. The “DMO” is the designation used by CO DMV for dealer plates which can be used for demonstration purposes only. This picture was taken in California. Why is his car being driven in California using Colorado dealer plates?
The most likely explanation is that the owner of the car was/is looking to avoid complying with California’s emissions laws and perhaps to even avoid paying taxes due on the automobile.
Dealer tags are sold every day on websites like craigslist.org and kijiji.com – keep an eye out. You’ll see what I am talking about. I even saw an ad, which has since been removed, that openly discouraged police officers from replying by saying “no cops, please”.
The point is: when your plates are lost or stolen – no matter who has them and for what reason; you are liable. Your liability ends when you have reported the loss or theft to the authorities.
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