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The Car Dump: Down Economy Means More 'Auto Give-Ups,' Why Not to Do It

By Caleb Groos on June 08, 2009 4:39 PM

With the economy down, car torchings are up. Well, not all cases involve an automotive blaze of glory, but more and more people are faking the theft and/or destruction of cars they can no longer afford in order to collect insurance money. The few thousand dollars in upside to such a scheme are almost assuredly outweighed by the multitude of consequences should it not turn out as planned.

The LA Times cites the National Insurance Crime Bureau (NCIB) to report that the first quarter of 2009 saw a 27% increase nationwide in suspicious vehicle fires and arsons over last year, and a 24% increase in "owner give-ups" (cars intentionally left or destroyed by owner). Tough to prove owner give-ups pale in comparison to the number of cars reported stolen. The Insurance Information Institute , identifies the top cities for auto give-ups as Houston, Las Vegas, Phoenix, L.A. and Chicago.

As detailed in the Times, some owners behind on payments have gone for the insurance payout instead by either orchestrating a flame or cliff-dive induced death for their car, or making an arrangement for someone to "steal" the car.

Though it screams bad idea at the outset, here are some reasons not to do it (in addition to physically harming yourself or others):

  • Insurance fraud can be a felony;
  • Arson is generally a felony;
  • There will also be a false reporting of a crime charge (if it's reported stolen);
  • If anyone else is involved, you're looking at a conspiracy charge on those crimes as well;
  • You'll still owe on a worthless car if caught; and
  • Generally, car thieves do not torch the cars they steal.

As Mike McKee, a crime bureau special agent covering Southern California told the LA Times, the majority of do it yourself auto give-ups "make no sense in the real world."

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