Auto loan fraud tops $9 billion in 2024

In 2024, auto lending fraud reached an estimated $9.2 billion, according to Point Predictive—up 16.5% year-over-year.

Why it matters: Dealers are increasingly getting caught in the fallout from fraudulent loans, facing more buybacks, tighter lender scrutiny, and even direct targeting by organized crime rings.

Yes, but much of today’s auto loan fraud isn’t committed by identity thieves using someone else’s information. It is committed by real applicants who lie about their income, job, or credit to get approved.

• This first-party fraud now accounts for the majority (72%) of lender losses, and many of these deals start on the showroom floor.

Zooming in: The largest fraud category, income and employment misrepresentation, made up $3.9 billion, or 42% of total fraud risk in 2024. Borrowers inflated their salaries, claimed fake jobs, or used doctored pay stubs to qualify for more car than they could afford.

• Another $2.5 billion in fraud exposure came from synthetic identities (using a mix of real, fake, or manipulated credentials) and credit washing (exploiting identity theft protections to remove negative credit history).

• In 2024, one in every 114 auto loan applications was tied to a synthetic identity, and credit washing attempts increased by 162% year-over-year.

• On top of that, true name identity theft—where real identities are stolen and used to apply for loans—rose 29% to $1.6 billion in 2024.

• And then there’s bust-out fraud (where individuals max out lines of credit with no intention of repaying). After a 27% spike in 2023, bust-out activity climbed another 6% last year, fueled by organized groups targeting high-end vehicles.

Worth noting: The fraud landscape is also being heavily reshaped by artificial intelligence. Mentions of AI and deepfakes in secure messaging apps spiked 644% in 2024, with fraudsters using AI-generated documents, videos, and disputes to bypass traditional safeguards.

Bottom line: As fraud losses grow and borrower deception becomes harder to spot, the consequences for dealers are getting harder to avoid.

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