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They want a no-nonsense leader with 10+ years running high-volume domestic stores.
Strong track record.
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Welcome to the CDG Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
*Bust-Out Fraud Levels | Year-Over-Year |
|---|---|
Q1 2025 | ↑ 54% (Elevated levels paired with tax season surge) |
Q2 2025 | ↑ 25% (Sustained growth as bust-out fraud spreads beyond early hotspot states) |
(Data sourced from Point Predictive)
*Bust-Out fraud occurs when real buyers with good credit buy multiple cars, then vanish without making a single payment.
⚡ Bust-out fraud is taking over as the #1 threat in auto lending
Bust-out fraud jumped 54% YoY in Q1 and another 25% in Q2, making it the top fraud concern in auto lending, per Point Predictive.
Here’s what makes it different: These aren’t identity thieves.
These are buyers with legitimate credit files, purchasing multiple vehicles across dealerships, then vanishing before a single payment clears.
That’s a direct hit to any store with a first payment default clause. If the buyer skips, the dealership buys the loan back.
NOTE TO DEALERS
Per Frank McKenna, chief fraud strategist at Point Predictive, dealers should keep an eye out for buyers coming back to buy again within 2–3 weeks, applicants claiming $200K+ income with vague “LLC” or “transport” jobs, and credit bureaus showing 10+ recent inquiries.
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⚡ Synthetic ID fraud is flooding auto loans, now topping 60% of cases
Synthetic identity fraud tied to auto loans doubled from $1B in 2019 to $2B in 2024, according to TransUnion. It’s also up 5.3% vs last year.
Even crazier, auto now accounts for over 60% of all synthetic fraud, more than any other credit category.
Unlike bust-out fraud, these files look legit. The IDs are fake, but the credit histories are clean. And by the time lenders spot it, the car is long gone.
CDG analysis via Joe Cecala
That also means the fallout goes beyond the stolen car. Think more rejections, more repos, and fewer subprime approvals.
Bust-out fraud (the #1 concern, remember) is the kind of threat that’s forcing dealers to rethink the basics.
McKenna said in Miami alone, a group dubbed the “South Beach Bust Out Syndicate” has stolen 1K+ vehicles, racking up $20M+ in damage, much of it hitting dealers with first-payment default clauses.
Can’t solely blame the lender there.
Nissan dealer Bill Vaughn puts it plainly: “If dealers don't have someone at a high level constantly in the CRM, they’re going to miss clear signs,” he said.
He knows it’s true because he’s seen the red flags himself. Like buyers with mismatched accents, vague stories about shipping companies, or addresses that lead to warehouses.
That’s why his team stacks simple, direct checks:
Call the buyer’s workplace
Message them on LinkedIn or Facebook
Drop the delivery address into Google Earth (clocks empty lots and warehouses)
Run a quick Zoom ID hold-up if needed
“Usually, one of these things will find a hole in their story, and then the moment you call it out for what it is, they are gone,” he said.
That said, Vaughn’s the first to admit: this isn’t a bust-out fraud fraud-specific play. But it creates just enough friction to expose something off.
And that’s the point. More dealers are shifting from “gut feel” to structure.
As A Rahman Sheikh, F&I manager at Maple Toyota in Canada, wrote on LinkedIn:
“Fraud prevention should be a structured and trained part of the F&I role, not just an informal ‘gut check.’”
That’s why his team watches for signs like:
Buyers who avoid eye contact (Not a perfect rule)
Buyers without questions on rate or payment
Buyers presenting sketchy IDs, but aren’t hesitant to show a second
Buyers without a digital presence or employer footprint to match the app
“We are the first line of defense,” Sheikh said. “Yes, lenders run checks, but by the time it gets there, it could be too late. It starts with us.”
We know fraud tools help, but what’s standing out most is the power of sharp internal systems and teams that know what to flag.
That’s why the strongest defenses we’ve seen aren’t flashy.
They’re built on a clear process, consistent checks, and leadership that stays close to the deal.
Got a story, tactic, or training style your team swears by?
Drop it in the poll below or send it our way.
Missed yesterday’s episode of Daily Dealer Live?
Grant Cardone talks dealer growth, Kia M&A heats up, and more
This episode is brought to you by: Experian Automotive
Featuring:
Grant Cardone, CEO of Cardone Capital
Tina Tasche, Innovation and Technology Specialist at Van Horn Automotive Group
Three opportunities hitting the CDG Job Board right now:
Leif Auto Group: Service Director (Texas)
Libertyville Lincoln: Sales Consultant (Illinois)
Ron Marhofer Auto Family: Platform F&I Sales Director (Ohio)
