Israel Ranks Sixth Among OECD Nations in Car Thefts per Capita

State comptroller: Stolen vehicles enable unsafe car repairs, as insurance companies profit; also warns that stolen parts are used to haphazardly repair many cars without owners' knowledge.

Daniel Schmil
Daniel Schmil
Car theft
Car theftCredit: Daniel Bar-On
Daniel Schmil
Daniel Schmil

Israel stands out among developed countries for its high rate of stolen vehicles, concludes the State Comptroller’s report on automobile theft.

Even though there has been a decrease in the number of thefts per capita over the past several years, Israel still ranks sixth among OECD nations in terms of vehicle thefts per capita. Only one-third of stolen cars were recovered as of 2009, relatively low by international standards.

Some 70% of stolen cars wind up in the Palestinian territories and are taken apart to be sold as spare parts. These parts are brought back into Israel, and account for an estimated one-quarter of parts used in repairs.

In addition, thousands of cars that undergo serious accidents are repaired at garages within the Palestinian territories, found the report.

The threat posed by vehicle theft goes beyond personal security and extends to the unmonitored use of stolen vehicle parts to repair badly damaged cars, found the report.

Faulty parts and airbags removed from stolen cars are sold by the insurance companies and used to repair badly damaged vehicles, without the knowledge of the buyers of these cars. These vehicles return to the roads after undergoing serious bodywork and haphazard fixes, states the report.

The number of car thefts decreased by 52% between 2006 and 2013, indicating that the police have had considerable success in fighting the phenomenon.

However, the comptroller had sharp criticism for the police’s unit for locating stolen vehicles (Etgar) and the Transportation Ministry. Thanks to insufficient regulation, these bodies enable the insurance companies to earn hundreds of million shekels a year by selling cars that were repaired after undergoing serious accidents.

Some 40% of Etgar’s budget comes from the private sector – namely from the associations of insurance companies and car leasing companies, noted the comptroller – even though insurance companies are indirectly profiting from car theft.

Based on regulations set in August, when a car is in an accident and the cost of repairs equals 60% of the car’s value, the car is considered a total loss and is sold for parts at 8% to 12% of the car’s former value. Yet if the cost of repairs equals 40% to 59% of the car’s value, the car is considered a near-total loss, and is sold to car dealers who specialize in repairing vehicles, for 43% to 47% of the car’s former value. Therefore, insurance companies have an interest in declaring cars near-total losses and not total losses, states the report.

The problem is that many of these near-total losses are not properly repaired before being resold, alleges the comptroller.

When an insurance company sells a near-total loss car to a dealer, the insurance company retains the car’s deed until the dealer presents a certificate from a garage. Yet Etgar found that this process is often handled improperly – garage certificates and receipts for parts are often forged. Some certificates contain registration numbers for garages that don’t exist.

The insurance companies should have no problem detecting these forgeries, yet they allegedly fail to do so, states the comptroller.

Furthermore, there’s a huge discrepancy in the estimated cost of fixing vehicles and what insurance companies ultimately pay. Insurance companies are required to have an assessor give an estimate for repair costs, yet a 2009 probe by Etgar found that the companies ultimately pay an average of 19% of assessors’ estimates, largely due to a reliance on cheap replacement parts. A proper repair should cost at least 60% to 70% of the original estimate, found Etgar.

This indicates that many of the replacement parts may be from stolen vehicles, and many of the necessary repairs may not be carried out, stated the comptroller.

Buyers of used cars have no way to learn about the vehicle’s history.

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