Auto Theft and Recovery; Preliminary Report on the Effects of the Anti Car Theft Act of 1992 and the Motor Vehicle Theft Law Enforcement Act of 1984

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

[Docket No. 97-042; Notice 1]

RIN 2127-AF55

Auto Theft and Recovery; Preliminary Report on the Effects of the

Anti Car Theft Act of 1992 and the Motor Vehicle Theft Law Enforcement

Act of 1984

AGENCY: National Highway Traffic Safety Administration (NHTSA),

Department of Transportation.

ACTION: Request for comments.

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SUMMARY: This notice announces the publication by NHTSA of a

preliminary report for public comment pursuant to the Anti Car Theft

Act of 1992 (codified in Chapter 331 of Title 49 of the United States

Code), which directs the Secretary of Transportation to submit a report

to Congress five years after the enactment of the statute (49 U.S.C.

3311(b)). The statute requires the Department to report on the effects

of federal regulations on auto theft and comprehensive insurance

premiums and what changes, if any, to these regulations are

appropriate.

As required by the Chapter 331, the agency seeks public review and

comment on this report prior to its submission to Congress. The report

does not contain recommendations at this time. The Department will

develop recommendations after a review of public comments.

DATES: Comments must be received no later than August 11, 1997.

ADDRESSES:

Report: Interested people may obtain a copy of the report free of

charge by sending a self-addressed mailing label to Walter Culbreath,

Publications Ordering and Distribution Services (NAD-51), National

Highway Traffic Safety Administration, 400 Seventh Street, SW.,

Washington, DC 20590.

Comments: All comments should refer to the docket and notice number

of this notice and be submitted to: Docket Section, Room 5109, Nassif

Building, 400 Seventh Street, SW., Washington, DC 20590. [Docket hours,

9:30 a.m.-4:00 p.m., Monday through Friday.]

FOR FURTHER INFORMATION CONTACT: Charles J. Kahane, Chief, Evaluation

Division, Plans and Policy, National Highway Traffic Safety

Administration, Room 5208, 400 Seventh Street, SW., Washington, DC

20590 (202-366-2560).

SUPPLEMENTARY INFORMATION:

History

As a result of the Department's recommendations in the 1991 report

to Congress on the Motor Vehicle Theft Law Enforcement Act of 1984 and

other information received by the Congress, the Anti Car Theft Act of

1992 was enacted. This Act built on the 1984 Act in several ways:

Federal penalties for auto theft were enhanced. A grant program was

authorized to help state and local law enforcement agencies concerned

with auto theft. Experts were called on to look into and report on

motor vehicle titling, registration, and salvage (the report was

published in February 1994). The National Motor Vehicle Title

Information System was to be established and the states were required

to participate in the system; the Theft Prevention Standard was

expanded, rules were established to check if salvage or junk vehicles

are stolen; and the Attorney General is to maintain a National Stolen

Auto Part Information System. Selling or distributing marked parts that

are stolen became a Federal crime. Random customs inspection to detect

stolen vehicles being exported were allowed. A pilot study on a

nondestructive inspection system was authorized. As in the 1984 Act,

the Anti Car Theft Act of 1992 calls for a report to the Congress on

the effects of the Act on trends in motor vehicle thefts and recovery.

The report is due five years after the legislation was enacted. The

Anti Car Theft Act requires that the five year report to Congress

address: motor vehicle theft and recovery statistics as well as their

collection and reliability; the extent to which motor vehicles are

dismantled and exported; the market for stolen parts; the cost and

benefit of marking parts; arrest and prosecution of auto theft

offenders; the Act's effect on the cost of comprehensive insurance

premiums; the adequacy of Federal and state theft laws; and an

assessment of parts marking benefits for other than passenger cars. As

in the 1984 Act, a preliminary report is to be published and announced

in the Federal Register for comment. This 1997 report addresses that

requirement.

The 1992 Act's amendments on theft prevention include: expanding

coverage to selected lines that were below the 1990/1991 median theft

rate, and including high theft multipurpose passenger vehicles and

light trucks that are rated at not more than 6,000 pounds gross vehicle

weight under the provisions of the theft standard. These changes had to

be made two years (1994) after the enactment of the Act. Three years

later (1997), based on the Attorney General's findings, the Secretary

of Transportation shall designate all remaining such lines of passenger

motor vehicles (other than light-duty trucks), unless the Attorney

General determines such additional parts marking would not

substantially inhibit chop shop operations and vehicle thefts. By the

end of 1999, the Attorney General shall determine if the rules have

been effective in inhibiting chop shops and vehicle theft and send

these findings to the Secretary. These findings are to include an

analysis of the effectiveness of factory-installed antitheft devices as

a substitute for parts marking.

The rulemaking process and manufacturer comments regarding lead

time to implement parts marking resulted in expansion of the Theft

Prevention Standard to a selected group of low theft line vehicle lines

and other passenger vehicles beginning with the 1997 model year.

Summary of Preliminary Report

To compile this report, the Department obtained data from sources

specified in the Act and available elsewhere, including the FBI's

National Crime Information Center, the Justice Department's National

Institute of Justice; the Bureau of Customs; the Highway Loss Data

Institute, the National Information Crime Bureau; insurance companies;

surveys of and interviews with state, county and city enforcement,

motor vehicle administration and court officials; and autobody repair

shops. The most recent theft data available for this report from the

National Crime Information Center is the 1995.

Motor vehicle theft was a growing problem in the early and mid

1980's. In 1984, Congress enacted the Motor Vehicle Theft Law

Enforcement Act (Public Law No. 98-547 (October 25, 1984)) in order to

reduce the incidence of motor vehicle thefts and facilitate the tracing

and recovery of stolen motor vehicles and parts from stolen vehicles.

The Department of Transportation implemented the 1984 Act by issuing

the Federal Motor Vehicle Theft Prevention Standard, which requires

manufacturers of designated high theft passenger car lines to inscribe

or affix the Vehicle Identification Number (VIN) onto the engine, the

transmission, and

[[Page 34495]]

12 major body parts. As an alternative to parts marking, manufacturers

could choose to install antitheft devices as standard equipment on

those lines. The objective of parts marking is to allow law enforcement

agencies to identify stolen vehicles or parts removed from stolen

vehicles--and to deter professional thieves since they will have

difficulty in marketing stolen marked parts and are more likely to get

caught if they steal cars with marked parts. The high-theft car lines

were designated in 1985, and actual parts marking began with model year

1987.

In 1991, the National Highway Traffic Safety Administration (NHTSA)

presented a report to the Congress assessing the auto theft problem in

the United States and, in particular, attempting to evaluate parts

marking. At that time, however, only two years of theft and recovery

data were available for cars with marked parts. Evidence of the

effectiveness of parts marking could not be obtained through

statistical analysis of theft and recovery rates. Nevertheless, the

Department found wide support in 1991 for parts marking from the law

enforcement community. Investigators believed that parts marking

provided them with a valuable tool for detecting, apprehending, and

prosecuting thieves. After considering the analyses, surveys and public

comments obtained during the preparation of the 1991 report, the

Department recommended that the theft prevention standard be continued

with minor changes.

In 1991-92, motor vehicle theft was still a large problem. Thefts

had increased from 830,000 in 1984 to 1,270,000 by 1990. In search of

stronger remedies, and in response to the Department's recommendation

and other information, Congress enacted Public Law No. 102-519 (October

25, 1992), the Anti Car Theft Act of 1992.

The 1992 Act requires the Department of Transportation to provide a

report to the Congress updating the findings of the 1991 report and

evaluating the effects of the 1984 and 1992 Acts. As a first step, the

Department is publishing this Preliminary Report for public review and

issuing a notice in the Federal Register announcing a 45 day

opportunity for public comment. Comments received will be summarized

and discussed as part of the Final Report that will be transmitted to

the Congress.

The goals of this report are:

To update the detailed statistics on motor vehicle theft

and recovery presented in the 1991 report. For this report, theft and

recovery data were available from 1984 through 1995, and insurance data

from 1986 through 1992.

To revisit the evaluation of parts marking, now that

extensive data are available on the theft experience of cars with

marked parts or antitheft devices. (However, since theft data were

available only through 1995, the effectiveness of the 1992 Act as

regards expanded coverage in 1997 and later models cannot be analyzed

at this time.)

To evaluate other provisions of the 1992 Anti Car Theft

Act and the 1984 Act, focusing on changes that have occurred since the

1991 report.

The basic reasons for stealing cars have not changed since the 1991

report. Cars are stolen for transportation, joyriding, export, for

repair parts, and to obtain expensive items such as stereo equipment

for a quick profit. Since the last report to Congress, a new type of

auto theft crime has emerged--carjacking--but the theft motives are

still the same. Fundamentally, though, two types of auto theft may be

recognized: (1) Professional thefts for profit, such as thefts to

supply chop shops, retagging and retitling, or for illegal export.

These thefts often result in a total loss to the original owner, but

there is hope they can be deterred by remedies such as parts marking.

They are believed to account for at least 23 percent of all thefts, and

perhaps substantially more. (2) Nonprofessional thefts for purposes

such as joyriding or to obtain temporary transportation. The vehicles

are mostly recovered; on the other hand, parts marking would not appear

as likely to deter these thefts.

As in the 1991 report, theft and recovery data come from the FBI's

National Crime Information Center. The data do not indicate the motives

for individual thefts or separate the ``professional'' from the

``nonprofessional'' thefts. Analyses based on aggregate data cannot

identify the effectiveness of each subsection of the 1984 and 1992

Acts, but can provide insights on the trend in thefts and recoveries.

The principal finding of this evaluation is that the auto theft

problem, which was growing during the mid 1980's, leveled off or even

began to decline after 1989-90. In 1995, there were 1,180,000 motor

vehicles stolen, a decline of seven percent from the all-time peak of

1,270,000 experienced in both 1990 and 1992. However, the 1995 thefts

are still 39 percent more than the 830,000 experienced in 1984. The

theft rate per 100,000 registered vehicles increased from 543 in 1984

to 714 in 1990, but had dropped back to 597 by 1995.

Passenger cars account for 71 percent of all motor vehicle thefts,

followed by light trucks--pickup trucks, sport utility vehicles and

vans--at 24 percent. The remaining thefts are split between heavy

trucks and motorcycles. Theft rates for all four vehicle types have

declined since 1990.

Recoveries of stolen vehicles have kept pace with thefts over the

years--recovery rates have remained stable at close to 80 percent of

thefts throughout 1984-95. Passenger cars have slightly higher recovery

rates than light trucks. Motorcycles have substantially lower recovery

rates than all other vehicle types, and they have gotten worse. It is

estimated that the annual economic loss resulting from vehicle thefts--

and from the fact that many vehicles are never recovered or only

recovered in a damaged condition--is at least $4 billion and could be

as high as $8 billion.

The average consumer cost of parts marking in 1995 models was $4.92

per car. At that cost, just a two percent reduction in the theft rate

would create consumer benefits well exceeding the cost of parts

marking.

Theft and recovery rates for car lines that got parts marking or

antitheft devices in 1987 were compared to the rates for the car lines

before 1987 and to the rates for car lines that did not get either

remedy. However, the fact that, originally, only high-theft car lines

got parts marking resulted in biases in the data that made it

essentially impossible to attribute a specific percentage reduction in

thefts or increase in recoveries to parts marking or antitheft devices.

Still, the analyses provided four indications (hedged with caveats)

that parts marking and antitheft devices quite possibly had beneficial

effects at times, apparently greater than 2 percent:

There seemed to be a conspicuous shift in theft rates in

model years 1986-87, coinciding with the introduction of parts marking.

Cars with marked parts had lower theft rates than expected, while those

with unmarked parts had higher rates than expected. The effect was as

strong as 20 percent when cars were new, but it weakened as they became

older and seemed to have vanished by the time they were two years old.

The latter is a noteworthy finding, since it is consistent with the

view that many professional thieves subsequently learned how to

obliterate the markings, and found them less of a deterrent.

Almost all car lines had lower theft rates in their early

1990's models than in the late 1970's models. However, the long-term

reduction was substantially greater in the car lines that got parts

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marking or antitheft devices than in the car lines that did not. It is

not so clear what happened during the crucial intervening years, the

1980's.

Recovery rates for 1987 cars with marked parts were

consistently higher than for corresponding 1986 models. However, this

one-time favorable effect consistently deteriorated after 1987.

There was a strong reduction after 1987 in the percentage

of vehicles that were only recovered in-part--i.e., missing their

engine, transmission or a major body part (those which for high theft

lines are required to have markings). There was a corresponding

increase in percentage of vehicles recovered in-whole (no major parts

missing) or intact. This trend was especially strong in the car lines

with marked parts.

Factory-installed antitheft devices were installed on far fewer car

lines than parts marking. The findings on the effect of antitheft

devices are generally parallel to those on parts marking, but less

conclusive. Generally speaking, there was no strong evidence that

factory-installed antitheft devices have a different effect than parts

marking. No data were available for evaluating the effect of

aftermarket antitheft devices.

Analysis of the effect of vehicle age on theft rates showed that

eight year old vehicles were just as likely to be stolen as current

model year vehicles. This suggests that parts marking methods need to

be sufficiently permanent to last up to eight years or more.

On the whole, the analysis results seem to suggest that Chapter

331's approach, which views both parts-marking and factory-installed

antitheft devices as effective deterrents to automobile theft has had

benefits. There is some indication that the effect of parts marking

might have been greater than two percent needed for cost-effectiveness,

at least at certain times. Also, parts marking and antitheft devices

seem to be integral components of a larger program to combat auto

theft. That program has, on the whole had an impact, as evidenced by

the leveling off and reduction of theft rates after 1990.

Collection and dissemination of theft and recovery information has

improved since 1991, primarily because technical advances in

communications and computer equipment made databases more complete and

accessible to agencies needing the information. The two systems called

for in the Anti Car Theft Act of 1992--the National Motor Vehicle Title

Information System and the National Stolen Auto Part Information

System--are either not completely in place or are so new that their

effects on vehicle theft (prevention, recovery or apprehension of

thieves) cannot be evaluated at this time.

In tandem with the number of motor vehicle thefts, arrests for auto

theft peaked in 1989 and have leveled off since then. In 1994, an

estimated 200,000 were arrested for auto theft or attempted theft in

the United States.

While recent surveys of district attorneys and law enforcement

agencies did not provide detailed statistical data on arrests,

prosecutions, and convictions for auto theft, they present an even more

encouraging picture than corresponding surveys in the earlier report.

Since 1991, there have been moderate increases in the number of

prosecutions under both Federal Acts. There have also been increases in

the level of effort directed to each prosecution. Now that they have

better evidence with which to work, both prosecutors and officers are

willing to invest more effort at obtaining a conviction. By 1996,

prosecutors saw an increase of over 20 percent in the number of

prosecuted cases, and 10 percent said that theft rates had declined in

their jurisdictions. By 1996, in contrast to almost no effect seen in

1991, almost half of the district attorneys reported an increase in

convictions--and most of them attributed it to the Federal Acts.

Stiffer sentencing was occurring in 45 percent of the convictions,

including a 75 percent increase in jail sentences. This could be even

higher, they report, but for prison overcrowding.

Law enforcement agencies report the same attitudes about the

deterrent effects of parts marking in 1996 as they did in 1991. They

feel that auto thefts for chop shop operations will continue if there

is a demand for a part, marked or not. But almost half of the

investigators feel that parts marking makes professional thieves more

cautious or even deters them completely from stealing cars with marked

parts. All investigators thought parts marking had no effect on amateur

thieves. Parts marking seems to have the greatest effect on chop shop

operators because of the increased cost of ``doing business.''

Auto theft investigators feel that parts marking is a valuable tool

for arresting and prosecuting thieves. In 1991, they saw little or no

effect, but by 1996, most of them felt that parts marking did assist in

identifying and recovering stolen parts and vehicles. About three

fourths of the law enforcement agencies in big cities said parts

marking helped in arresting both chop shop operators and professional

thieves. Auto theft investigators, as in 1991, still say that more

permanent methods for parts marking are needed. Even though it is

unlawful to remove labels from marked parts and the labels are required

to leave evidence that they were once on the marked part, thieves have

found methods for removing both the label and its ``footprint''. The

investigator then has to be sufficiently knowledgeable to recognize

that the part should have a label. Also without the label it is very

difficult to trace the part back to the vehicle from which it was

stolen.

Investigations and assistance provided by NHTSA to the Justice

Department in the prosecution of violations of criminal statutes

concerning altering or removing markings and forfeiture of certain

motor vehicles and motor vehicle parts, and chop shops has brought to

the agency's attention the fact that many law enforcement officers do

not know which vehicles must be marked, where the markings are to be

located or which parts are to be marked. Also, investigators often are

unaware of the replacement parts-marking requirements. The agency

investigators feel that an education program for law enforcement

officials on the applicable parts-marking requirements is needed.

Data received from the Customs Service since the 1991 report,

indicates it has improved its ability to recoup stolen vehicles.

Insurance companies have not reported any effects of parts marking

on insurance premiums. Some insurance companies do offer discounts on

comprehensive premiums for vehicles equipped with certain types of anti

theft devices. Analysis of claim payments also has not shown any

specific effects of either parts marking or antitheft devices.

Insurance companies report that their used part policies have not

changed since 1986. About three fourths of the reporting companies

encourage the use of used parts for crash repairs. Most companies rely

on the repair shops to obtain parts from reputable sources.

Analyses of the effectiveness of parts marking in ``high theft''

passenger car lines suggests that parts marking has benefits in

reducing theft rates, and at times in increasing recovery rates. These

benefits seem to exceed the cost of parts marking. The greatest impact

of parts marking appears to have affected chop shops and

``professional'' auto thieves. While more vehicles stolen for export

are being recovered, the number recovered is too small to say that

parts marking has helped reduce thefts for export or recovery of these

vehicles. Given that parts marking appears to be effective in currently

marked passenger car lines, there is no reason to doubt

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that it could also have benefits for other passenger vehicles.

In conclusion, it appears that parts marking and other provisions

of the 1984 and 1992 Acts have given the law enforcement community

tools they can use to deter thefts, trace stolen vehicles and parts,

and apprehend and convict thieves. Theft rates leveled off after 1989-

90 and have begun to drop. While the program to reduce auto theft has

had an impact, there appear to be three areas with potential room for

improvement: (1) Insurance companies and motor vehicle departments

could take better advantage of the existing parts marking program by

routinely requiring inspection of the markings of used parts acquired

at body shops and used vehicles brought in for new titles. (2) To the

extent that current parts markings can be obliterated, their long-term

deterrent effect may be diminished. (3) Since many vehicles still do

not have marked parts, the deterrent effect of parts marking at this

time may be offset by increased thefts of the vehicles without marked

parts.

Comments Sought

In addition to any comments regarding this report and its findings

on effectiveness in deterring or reducing motor vehicle theft or

enhancing recoveries, comment on the following questions are sought:

Section 33113(b)(11) of Title 49 requires the report to

include recommendations to Congress for legislative or administrative

action for-- (A) continuing without change the theft prevention

standards prescribed under Chapter 331; (B) amending this chapter to

cover more or fewer lines of passenger motor vehicles; (C) amending

this chapter to cover other classes of motor vehicles. Please provide

your comments on all or any one of these items, including the basis for

your position.

Given that the current marking methods cost the consumer

less than $5 per vehicle and that Congress allows up to $22 per vehicle

in 1995 dollars, are there more permanent methods for marking vehicles

with the Vehicle Identification Number (VIN) that can be accomplished

within the Congressionally mandated limit? Please include documentation

on the marking method, how permanent the markings are (how difficult it

is to remove the markings and what evidence is likely to remain that

there were markings), cost estimates including the cost of any

materials, equipment, tooling and labor. Please identify the economic

year for the cost estimates. Please include a description of how the

markings are applied including the time to mark all the major vehicle

parts. If the information to be supplied is proprietary, application to

the agency Chief Counsel's Office can be made.

Are there other vehicle parts (e.g., air bags, radios)

that should be classified as major parts and thus subject to parts

marking? Some states allow glazing to be etched with the VIN. Should

glazing be included as a major part and be required to be marked?

Please provide a rationale with evidence to support any

recommendations.

Under the current standard, a limited number of lines are

exempted from parts marking because the vehicles are equipped with

factory installed antitheft devices as standard equipment. Because of

the limited data available for evaluation, the effectiveness of

antitheft devices as a deterrent could not be determined with much

statistical confidence. Is there other evidence to support the

effectiveness of antitheft devices? Please supply such evidence along

with a description of the applicable antitheft device.

Even though some insurance companies offer discounts for

certain types of antitheft devices, it is unclear as to which devices

are considered desirable for obtaining a discount. Also, what

additional efforts are made by insurance companies to encourage parts

marking and/or the installation of antitheft devices? What other

measures does the insurance industry take to reduce the occurrence of

motor vehicle theft? Please supply any supporting evidence that shows

that these measures are helping to reduce motor vehicle theft or

apprehending auto thieves.

All comments received before the close of business on the comment

closing date will be considered, and will be available for examination

in the docket at the above address both before and after that date. To

the extent possible, comments filed after the closing date will also be

considered. The NHTSA will continue to file relevant information as it

becomes available in the docket after the closing date, and it is

recommended that interested people continue to examine the docket for

new material.

People desiring to be notified upon receipt of their comments in

the rules docket should enclose a self-addressed, stamped postcard in

the envelope with their comments. Upon receiving the comments, the

docket supervisor will return the postcard by mail.

Authority: 49 U.S.C. 30112, 33113(b).

William H. Walsh,

Associate Administrator for Plans and Policy.

[FR Doc. 97-16750 Filed 6-25-97; 8:45 am]

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