Catalytic converter thefts present a growing problem for dealers and their customers. In 2021, the National Crime Bureau estimated that more than 52,000 catalytic converters were reported stolen, compared with 1,300 in 2018. That’s 40 times as many converter thefts, and it doesn’t include the number of unreported thefts. If the repair cost is the amount of someone’s deductible, they may not report the theft to the police or the insurance company since they will have to pay the money either way. Filing a report creates the possibility of increased insurance premiums; not filing maintains the status quo.

Thieves value catalytic converters because they contain precious metals such as palladium, platinum, and rhodium. The metals’ values have increased exponentially. Worse, catalytic converters are easy to steal and hard to trace.

Another problem caused by catalytic converter theft is the damage when thieves cut the converters from the car. They are in a hurry and don’t care about being precise, so they often damage the oxygen sensor and may take other parts of the exhaust system, such as the muffler. That means repairs after the theft often involve more than just replacing the catalytic converter itself. A stolen catalytic converter usually costs $500-$600 to the thief, but replacing it costs the owner approximately $3,500. Dealers both assist customers who have had the unfortunate experience of having their catalytic converter stolen and are victims themselves.

What can be done about the issue of catalytic converter theft?

• Increase enforcement on thieves and black-market facilities
• Make it harder for thieves to get catalytic converters
• Make it easier to trace stolen catalytic converters

Largely due to media coverage and complaints from constituents, ten bills were introduced during the 2022 legislative year in California to try and address catalytic converter theft. New car dealers are supportive of bills to increase enforcement against bad actors stealing and dealing stolen catalytic converters and supportive of proposals aiming to inform customers about the availability of VIN-marking services.

However, some of these proposals aimed to bar dealers from selling new and used vehicles without permanently marking the vehicle’s VIN on the catalytic converter themselves before sale. These bills were very problematic, as dealers do not manufacture the cars and thus should not be responsible for this work – and certainly not as a free service on behalf of vehicle manufacturers. Dealers are already facing a severe vehicle technician shortage, and a requirement like this would greatly exacerbate this shortage.

How do you make it harder to steal a catalytic converter? Vehicles stored outside are more vulnerable than vehicles inside a garage, so dealerships are attractive targets for thieves. One dealer installed a 7,000-volt security system around the dealership. He hasn’t had any problems since. However, one of his customers had seven trucks. Thieves took all seven converters. It took eight weeks for replacement parts to arrive; thieves took all seven converters again one short month later.

Experiences like that have made the third strategy more attractive (making it easier to trace stolen catalytic converters). In January 2022, Indiana Rep. Jim Baird introduced H.R. 6394, the Preventing Auto Recycling Theft (PART) Act, which NADA strongly supports. The bill is intended to increase traceability and enforcement. A day later, Jan. 14, 2022, it was referred to the Subcommittee on Highways and Transit. It still must pass the House and Senate, so it is a long way from being signed into law by the president.

If the bill passes, the idea would be to use a $7 million grant program to cover the cost of stamping VINS or other identifiers onto existing vehicles’ catalytic converters. The vehicle owner wouldn’t have to pay anything for this to be done. Dealers would also be able to use the grant program. While the $7 million grant program would be helpful, it wouldn’t come close to covering the cost of marking catalytic converters on vehicles on California dealers’ lots (we sell three million new and used vehicles a year) – but could serve as an interesting model for states to potentially copy.

The bill would also require OEMs to stamp the VIN on catalytic converters when vehicles are built. Purchasers would have to check for and keep records of these numbers. Catalytic converter theft, sale, trafficking, or purchase (if the buyer knows the converter was stolen) would be a federal crime. Someone convicted under this law could spend up to five years in jail.

In May 2022, 14 trade associations, other industry organizations, and NADA asked Congress to take up H.R. 6394 and get it moving. The signers specifically asked Congress to send it to the House Energy and Commerce Committee for a hearing.

If you have dealt with catalytic converter theft, you recognize the importance of this issue. Now is the time to reach out to your representative and ask them to support H.R. 6394. For a full list of committee members, visit https://energycommerce.house.gov/subcommittees/energy-and-commerce-117th-congress.

We can help Congress and, later, the Senate understand how important this issue is, but we will only be successful if we put in the effort.

Meanwhile, as of press time, many of the catalytic converter bills are still pending in California. CNCDA is vigorously fighting proposals to require dealers to permanently mark the VIN on catalytic converters of new and used vehicles before sale. However, we are very supportive of bills that aim to increase the enforcement on bad actors. What the California legislature chooses to do this year is important for all dealers, as it could set the tone for how other states address this issue. California’s legislative session ends on August 31, and as we are currently writing this article, we are tracking if the problematic proposal makes it to Governor Newsom’s desk and we will ask for a veto.