Someone stole my truck. I got a crash course on the wild black market for stolen cars

A couple weeks ago, my truck was stolen. This wasn't just any truck. It was a 1999 Toyota Tacoma that I owned for 20 years. I bought it used back when I was a teenager, and it was my primary mode of transportation for basically my entire adulthood. Sure, it was dented. It was rusting. It was starting to fall apart. But I loved that truck.

Then, in the dead of night, in front of our apartment in San Francisco, poof, it was gone. I moved to this city almost exactly a year ago — and this is the third time the truck was either stolen or broken into since I arrived. Which is weird: It was never broken into or stolen in the 19 years before. That includes the years I lived and parked my truck in rough parts of Brooklyn.

My personal experience matches the data. The San Francisco Bay Area has one of the highest rates of car theft of any major metro area in the nation. New York City has one of the lowest. (H/t to Greg Morton for crunching the numbers and making this pretty map.)

Maybe my experience of living in New York and other low-theft areas was why I was so naive. I didn't invest in an alarm or other anti-theft devices. I didn't have comprehensive insurance that would cover the cost of theft (ouch). I mean, why would I? It was an old, beat-up truck. I really believed that with so many nicer vehicles out there, why would thieves even bother?

But over the last couple weeks, I've gotten a crash course on the black market for stolen cars, and I've come to learn that it's actually not the nice ones that are the most frequent targets. It's the clunkers. If you think about it, that's pretty messed up. It means that the people who can least afford to have their cars stolen are more likely to have their cars stolen.

Here's the National Insurance Crime Bureau's list of the top five most stolen vehicles in America last year:

Notice that Tesla, Mercedes-Benz, Lexus, BMW, or Range Rover are nowhere on this list. Part of this is a function of the fact that there are fewer of these vehicles on the road — and parked on the street. But, more importantly, newer and fancier vehicles have much more sophisticated anti-theft technology. Unlike them, vehicles like my 1999 Toyota Tacoma were not equipped with an electronic engine immobilizer, which requires a smart key with a special chip that sends an encrypted signal to start the car. My truck's key technology consisted of a piece of jagged metal, which made it much easier to steal.

The Slow Spread Of The Immobilizer

In the late 1980s and early 1990s, cars were being stolen left and right. By 1991, national car thefts hit a historic peak, with more than 1.7 million cars stolen, or about 659 thefts for every 100,000 people.

The crazy part of this story is that car companies and drivers had the power to stop the tsunami of vehicle thefts. They had a range of technologies at their disposal, including various kinds of engine immobilizers, the first of which was invented back in 1919. All it took was a bit of research and development to make the technology more sophisticated, affordable, and widespread. So why didn't this happen between 1919 and the 1990s?

Analyzing the failure of the private market to beef up anti-theft technologies in cars, the economist Simon Field wrote in 1993 that the problem was that drivers lacked strong incentives to take precautionary measures. "In practice, there is very little incentive for individual owners to prevent auto theft, since most of the costs fall in the form of insurance premiums and government expenditures rather than in the form of losses falling to individual owners," Field wrote. In other words, why invest in car security when, on the off-chance your car gets stolen, taxpayers will foot the bill for the police work and your insurer will compensate you for any losses? Economists call this "moral hazard," which refers to the lack of incentives to shield yourself against risks when you're protected from the consequences.

Meanwhile, Field argued, car manufacturers had little incentive to provide built-in security devices, like engine immobilizers, because insurance-protected consumers apparently didn't demand them. "In the current automobile market, the incentives on individual car owners to secure their vehicles are so low that manufacturers have little incentive to research and develop more effective security measures," Field wrote. As a result of this market failure, Field recommended that the government mandate better security technology for all new cars.

But, despite apparent incentive problems, the market did end up changing. And as bad as car thefts were in America in the early 1990s, it was actually Europe that led the way for a more car-secure future.

The Immobilizer Gets Mobile

After the fall of the Iron Curtain in 1989, Eastern European gangsters began flooding into Western Europe, stealing cars, and driving or shipping them back home to be resold. The problem was particularly acute in what was formerly known as West Germany. The annual number of car thefts there more than doubled between 1990 and 1992.

Car manufacturers and individual car owners in Europe were just like those in the United States: they lacked much in the way of incentives to do something about the problem. But there was one group that did have strong incentives to fight the problem: insurance companies.

German insurers, which often footed the bill for stolen cars, were hemorrhaging money. And they decided to put an end to it. One of the largest German insurance companies, Allianz, decided to only fully reimburse victims of car thefts if their cars were equipped with immobilizers. Other German insurers offered policyholders big discounts for driving cars with the technology. This created incentives for consumers and a growing market for anti-theft technologies.

Siemens, the German industrial conglomerate, was one of the first big manufacturers of electronic engine immobilizers. Responding to swelling demand, in 1995, it made a huge step forward by integrating an immobilizer system using an encrypted transponder with a key fob, allowing drivers to remotely unlock their cars with the push of a button on the same device used to start their cars. Mercedes-Benz was the first car company to adopt this tech back in 1997. Ford, an American company, was another early adopter of electronic immobilizers, but, interestingly, it put them in its cars sold in Europe first.

Governments in Europe gave these efforts a huge boost. The European Union issued a regulation in November 1995 that made the immobilizer mandatory in all cars sold within its borders starting in October 1998.

For whatever reason, the United States never mandated it (although it "encourages" it), which maybe explains why car companies were slow to adopt the tech on their fleets here — and why you can continue to see vehicles like the 2004 Chevy Silverado pickup truck and the 2000 Honda Civic on the list of most stolen vehicles. Honda Civics adopted the immobilizer in 2001, which is why post-2001 Civics are much less likely to be stolen.

Nonetheless, due to the dramatic success of this tech and the market dynamics unleashed in Europe, and perhaps some encouragement from the federal government and insurance companies, automakers began making immobilizers more and more standard on vehicles sold in the United States. And you can see the results in the data:

The spread of the immobilizer did not completely solve the problem of car theft, of course. By 2019, the annual rate of car thefts had fallen about 67% from its peak in 1991, but there still were roughly 220 car thefts for every 100,000 inhabitants, according to FBI data.

Since the pandemic began, however, we've seen a significant surge of car thefts. Many vehicles stolen today still don't have immobilizers or have badly designed ones. Others do have well-designed immobilizers but they're stolen because of driver carelessness, such as leaving their key fobs in easy-to-access places, like their car's cup holders.

Cars are stolen for various reasons: for resale, for joyriding, for use to commit crimes. Many are stolen and broken down for parts, like the catalytic converter, a technology used to scrub car exhaust of noxious fumes. Prized because they contain valuable metals, catalytic converters have seen an astounding 1,215% increase in theft since 2019, according to the National Insurance Crime Bureau (NICB). Thieves after these parts often bypass immobilizer systems by opting to not steal the car at all. Instead they use power tools to cut the parts off while the vehicle is parked on the street.

Another way of bypassing immobilizer systems is carjacking, holding drivers up at gun or knife point and stealing their car while it's running. The NICB says that Los Angeles has seen a 53% increase in carjackings since 2019.

And despite the clear benefits of having sophisticated immobilizers for preventing thefts, car companies in the United States have continued to sell cars either without them or with subpar immobilizers that thieves have found ways to hack.

Up until recently, many Kia and Hyundai cars did not come standard with immobilizers. And car thieves have noticed. Recently, there's been a viral craze on TikTok led by the so-called "Kia Boyz." It's a group of adolescents making TikTok videos that show how to steal cars made by Kia and Hyundai, using things like a run-of-the-mill USB cord to turn the ignition and start the engine. Kias and Hyundais now account for almost half of all cars stolen in some metro areas. It's gotten so bad that Progressive Insurance has restricted coverage to owners of certain Kia and Hyundai models. And the car companies are now facing multiple lawsuits.

Seeing a surge of Kia and Hyundai thefts in their city, the Milwaukee City Council recently wrote a letter to their parent company. "We write to ask that KIA Motors America Inc., make fundamental changes to the mechanisms used to secure its vehicles," the city council wrote. "We do this not only in the interest of protecting the property and persons of those who purchase your vehicles, but to try and do something to lessen the drain on police and other resources that seems directly attributable to certain defects in their locking system." Kia and Hyundai are reportedly now, as of 2022, making all their vehicles come standard with immobilizers.

As bad as the recent surge in car thefts is, however, it looks like a blip compared to the rate of car thefts America saw back in the early 1990s. We can, for the most part, thank a little technology called the immobilizer for that — a technology that, unfortunately, did not come standard on my 1999 Toyota Tacoma.

My truck, by the way, was eventually tracked down. A parking enforcement officer found it illegally parked on the outskirts of San Francisco and then had it towed to an impound lot. When I got word, I rushed to the lot. Walking in with police officers, I inspected it. My truck was trashed. The vandals had crashed it and stripped it for parts. Inside I found an empty pizza box, dirty napkins, a Sprite bottle, a thermos, sink faucet parts, and a spray-painted Darth Vader mask. I'm not making this up.

I decided that, given the money it would take, rebuilding the vehicle just wasn't worth it. The truck was already starting to break down before this incident. So, long story short, I've decided, after 20 years, it's finally time for a new truck. With supply chain issues resulting in a brutally dysfunctional car market, it's probably the worst time to buy. But I need some wheels! Stay tuned for an exploration of the wild world of car dealerships in a future Planet Money newsletter.

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