Grand theft auto? Not if wholesale vehicle auctions can help it

An auto auction lot can be the mother lode for a vehicle parts thief.

The lots have variety: clusters of used makes and models of multiple ages spread over several acres that may not always be monitored. Valuable and vital vehicle parts such as catalytic converters and mufflers can sit ripe for the taking.

Executives at wholesale vehicle auctions know would-be thieves know this, too. Craig Amelung, a 31-year veteran of the auction industry, said thieves are not too choosy about what they target.

"If it's a part on a car, and they believe that they can make a profit on it or they believe that they need it, then it's fair game in their eyes," said Amelung, general manager of three Manheim auctions in the mid-Atlantic region.

The potential for increasingly complex lot breaches and theft — be it catalytic converters, key fobs, mufflers, floor mats or entire vehicles — has compelled auctions and auction groups to invest more heavily in detection and prevention strategies over the last decade.

Thieves may have a flavor for certain parts depending on the month or year, said David Reeder, senior director of security operations at Cox Enterprises, which owns Manheim.

Theft of catalytic converters, for instance, jumped in 2021 and 2022 amid higher prices for the precious metals contained within the part: palladium, platinum and rhodium, which help remove pollutants from an internal combustion engine vehicle's emissions.

The National Insurance Crime Bureau tallied 64,433 U.S. catalytic converter theft claims last year, up from 50,503 in 2021. Through the first nine months of 2023, that number was 24,077, which outpaces 3,721 in full-year 2019 and 16,214 in full-year 2020. One theft ring that involved selling stolen catalytic converters to a metal refinery for tens of millions of dollars grew to include 21 people across five states before the U.S. Justice Department cracked down on it in 2022.

Auction operators are certainly not ignorant of other theft trends beyond catalytic converters, Reeder said.

"We had a big case, one time — it was the SD cards that go into entertainment centers," he said.

Even floor mats in vehicles can be targeted, Amelung said.

There used to be a major focus on security personnel "seeing" trespassers in-person or on surveillance camera feeds, Reeder told Automotive News.

That has changed over the last decade. Now machine-aided detection is critical, he said.

"[We use] thermal cameras that are alert-monitoring, so not just some guy looking at 100 cameras in a room," Reeder said.

Artificial intelligence can play a part, Reeder said: Some cameras and software systems can detect people within the perimeter and alert auction personnel to their presence. He said he sees potential perimeter breaches stopped "on a weekly basis" thanks to thermal cameras.

Bill McCready, regional vice president in the Southeast for America's Group, told Automotive News more traditional theft prevention tools such as guardrails, fences and other physical barriers remain paramount, too.

"Pretty much all of [our auctions] have some sort of fencing around them," McCready said.

It's not simple picket fencing: Many auctions opt to place barbed wire on top of chain-link fences or erect 7,000-volt electric fences. Some electric fences are equipped to emit noise when tampered with.

"When it is touched or cut, it sounds an audible alarm," McCready said. "It also calls the police and then calls the security company, which controls the security fence, and then they contact the auction. That's a big deterrent — seeing the signs for the electric fence, seeing the barbed wire, seeing the chain-link fence."

Establishing a work culture that emphasizes watching for unusual activity can be helpful in preventing theft, said Chad Anderson, general manager of Greater Rockford Auto Auction in Rockford, Ill., and vice president of Great Lakes Auto Auction in South Bend, Ind.

Anderson, who spoke at the National Auto Auction Association's annual convention in Chicago in September, said employees can act as eyes and ears for auction operators.

"There's so many times where it'll be the end of the day, it's 5 o'clock, I have employees leaving," Anderson said. "Someone will call me — 'Hey, there's two people walking on the outside of the fence. They're looking at cars. They seem kind of fishy.' "

Also crucial is broader engagement with peers across the auction industry, auction executives told Automotive News.

"I get calls from different people," Cox's Reeder said. "We talk about issues they see."

Common and unique issues alike have to be taken seriously, Manheim's Amelung said, especially because all auctions have an obligation to protect buyers' and sellers' assets while those are in the lanes or stored on the property until transporters can pick them up.

"That is the root of what drives us as auction operators," Amelung said.

Working with local law enforcement to increase their awareness of auction infrastructure is a must, given the theft risks auction operators face, Amelung said.

"That's all part of the community engagement that we have, but it really is a big benefit because the police are very active in a lot of cases around our facilities," he said.

Trade associations and groups within the automotive industry have pushed for parts theft to be addressed at the federal level — most recently, that which involves catalytic converters.

In January, U.S. lawmakers reintroduced the PART Act — known as the Preventing Auto Recycling Theft Act — which would aim to cut catalytic converter thefts by requiring new vehicles to have the VIN stamped onto the converter, making its origin more traceable.

The bill would also create a grant program to allow dealerships, repair shops and other relevant parties to stamp VINs onto converters of used vehicles.

In August, the National Automobile Dealers Association published a brief in which it urged members of Congress to co-sponsor the legislation. In July, National Auto Auction Association leadership told Automotive News that supporting the bill is one of the association's legislative priorities.

"We are in support of the PART Act from the association standpoint," Amelung, the association's president-elect, told Automotive News. "We actively endorsed that, and we're working with legislators both on a federal and a state level to support any type of legislation that would bring greater penalties for [vehicle and parts theft]."