The Economics of Car Theft

Jobs are hard to find, unemployment is on an ever-increasing upswing in spite of official talk of reprieve and support. It’s at times like that anyone would assume theft would increase. Items of extreme value such as cars are one of the most commonly sought after items. First of all, because they are in such demand, second of all, because of the relative ease of selling them off by bits and pieces rather than as a whole, making them hard to track in spite of registrations, vin numbers and such. So why is it that in this time of economic crises auto theft is not on the rise right along with unemployment and insecurity?

Technology is the answer. It is harder now than ever before to steal a car and not get caught. Better security systems including onboard global satellite support and monitoring on the newer models make theft virtually impossible. Is your car gone? Call the support hotline and they track it on its global positioning tracker, and turn it off so the thief is stuck. Not only do they stop the car, but the police are alerted to the scene immediately. With technology like that the average thief can barely get around the block much less to the nearest chop shop.

Its true older vehicles are more at risk, but even older cars can get similar versions including tracking devices to help locate them when they are stolen. Today, the chances a car will be taken is less than a third from the chances in 1989 according to Steve Weisbart, the chief economist and senior vice-president for the industry group, Insurance Information Institute. Mr. Weisbart also states that in spite of that drastic decline in theft, auto insurance is not keeping pace with the reduced threat. Instead, rates are climbing steadily year after year.

Besides the increase in technology, many states began to employ stricter methods of cracking down on auto theft, when it reached its heyday in the early 1990’s. Since then the use of bait cars and various task forces have taken a bite out of the once thriving chop shops. Auto insurance practices need to follow suit and recognize the new economic realities of automobile ownership, and likelihood of theft.

Auto insurance companies could easily require proof of some sort of electronic tracking in exchange for a discount. That would decrease the odds of being vulnerable to an older model car without any form of tracking device. In the past, insurance companies would give discounts for simply having an alarm installed, and they rarely did anything but annoy the neighborhood when they went off because someone walked too close to the car.

But there are other factors affecting car insurance rates, such as increases in severe weather damage and a more litigious culture among the US population. As long as these trends continue, drivers can expect that insurance rates will not drop simply because of reduced theft rates.