Why 1 in 4 dealers are losing 10+ vehicles to fraud (and how to stop it sooner)

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Hey everyone,

A few standout roles just hit the CDG Job Board as teams gear up for the year ahead:

Automotive Service Advisor at Permian GMC Chevrolet — (NM)
Dealer Relationship Manager at Reliance Motor Credit — (MD/VA)
GSM at Gettel Automotive Group — (SW Florida)

If you’re looking for your next move (or know someone who is) take a look!

— CDG

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Welcome to the Market Pulse—your cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.

Fraud activity is accelerating across dealerships: 77% of dealers say fraud activity has increased over the past 24 months, and 76% say it’s up 20%+.
Identity fraud is turning into direct inventory loss: 48% report losing 4+ vehicles to identity fraud in the past two years, and 24% say they’ve lost 10+.
And verification timing is separating losses from prevention: Early ID checks are killing fraud attempts outright, while delayed verification is turning one risk into income and trade losses.

(Source: eLEND dealer survey / Experian Automotive dealer survey / CDG interviews at NADA)

Fraud is shifting from a rare event into a recurring operating cost.

Last week at NADA, I spoke with Pete MacInnis, CEO of eLEND Solutions, about eLEND’s latest fraud snapshot survey, because the findings were wild.

Case in point:

The study found that a solid 77% of dealers believe fraud-related activity has increased over the past 24 months.
That nearly half of those lost 4+ vehicles to identity fraud during that stretch.
And that one in four reported losing 10+ units in the same span.

That’s one ugly reality. And a ton of $$$ lost.

In fact, I also spoke with two Experian Automotive leaders during the conference, who shared that a single fraudulent transaction typically results in $10,000–$20,000 in losses, with many dealers reporting even higher exposure depending on the deal structure.

NOTE TO DEALERS:

Fraud became a major buzzword during and immediately after the pandemic, when the bulk of transactions first shifted remote.

But it’s 2026 now…

And when only a portion of fraud losses ever come back (with insurance typically covering 1–50% and lenders absorbing 26–50% at best, per Experian), it’s worth nailing down a fraud awareness protocol that works just as tightly online and in-store as your processes for pricing, inventory sourcing, or F&I compliance.

Delaying verification is allowing identity, income, and trade fraud to stack.

The industry default is to treat fraud like an F&I problem, because that’s where lender scrutiny lives.

But both eLEND and Experian argued the opposite.

As they see it: The earlier identity and data checks happen, the fewer “bad” deals ever reach the finance office.

The reasoning there is mainly because fraudsters are testing stores for friction.

And when a dealership introduces early verification (ID authentication + alternative data checks) many attempts stop immediately.

WHY IT MATTERS:

Experian describes dealership fraud prevention like a relay race, with most stores dropping the baton mid-race.

That’s why the goal should be this:

Sales starts the race by confirming identity early (before test drive or credit pull)
Data verification builds momentum by flagging income, employment, or trade inconsistencies as the deal progresses
And F&I finishes the race with a cleaner, lower-risk transaction instead of inheriting stacked fraud

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With fraud losses climbing and more deals starting online, we asked what’s actually working on the ground.

Here are the Dos and Don’ts MacInnis (eLEND) and Experian’s automotive team emphasized at NADA last week:

Do: Verify identity earlier than you think you need to.

eLEND’s survey shows that most dealers are still introducing ID verification inconsistently, often late in the deal, which is allowing fraud attempts to slip through until F&I.

❝

MacInnis’ suggestion: “You tell [shoppers], ‘Okay, you know what? We are gonna send you a link. We need this information, your consent to do some little check to verify your identity. [With that], half the fraudsters say, ‘Okay, goodbye. And check out. They’re done.”

Peter MacInnis

He added that doing so shouldn’t slow down a safe deal if the customer has what’s needed and isn’t a fraudster. But it does often stop bad deals from ever starting.

Do: Eliminate manager discretion on red flags.

During my conversations with both eLEND and Experian, one pattern came up repeatedly: fraud prevention breaks down the moment someone decides to override it.

“What we see is the system flags something, the manager looks at it, and says, ‘It’s probably fine—let’s keep moving.’ That’s where the losses happen,” MacInnis told me.

Why that matters: Dealers actively reducing repeat fraud are instead building processes where a flagged ID, income, or trade automatically triggers a required next step (secondary verification, escalation, or pause) no exceptions.

Don’t: Ignore the impacts fraud has on reputation.

When a fraudulent deal slips through, a dealership creates one confused identity-theft victim and signals to fraud rings that the store is worth revisiting.

Per Experian: “We are talking about lenders and fraudsters, but manufacturers have a role in play here as well, because…for example, if a car is fraudulently acquired, sent overseas, [the OEM] loses allocation. They lose their lifeblood over the vehicles that they need to sell. It’s an industrywide issue.”

In other words, the best fraud prevention centers around protecting your store’s standing with customers, lenders, and OEMs before one missed check turns into lasting damage.

One of the strangest things about fraud is how it’s still talked about like a robbery.

Something dramatic. Something rare. Something that happens on a really unlucky day.

But that’s not how it actually shows up.

Instead, when Karianne Thomas told us a few weeks ago that there’s “not a day that goes by” without a fraud attempt at Zeigler Auto Group, that reframed it for me.

Which is why my first move would be simple: Pull in my managers and audit whether the fraud tools we already have are being used every time, both online and in-store.

Not bought. Not installed. Actually used.