Concern about the likely rise in car insurance fraud continues to provide a disturbing contradiction to figures that show the number of vehicle thefts across Australia is continuing to drop.

The March quarter figures from the National Motor Vehicle Theft Reduction Council (NMVTRC) show 12,343 thefts, down 15% from the corresponding period last year and 6.3% less than the December quarter.

But Executive Director Ray Carroll says the effects of the economic downturn have yet to be felt in terms of thefts and stolen vehicles not recovered.

“If there’s a sustained impact on unemployment we could see a rise in short-term joyrider thefts which could turn our good numbers around,” he told insuranceNEWS.com.au.

“In terms of professional theft there’s the risk of profit-motivated car thieves who are involved in the fringe automotive industry who mix legal and illegal activity ramping up their ‘illegal’ side.

“Added to that is evidence emerging of an increase in insurance fraud made to look like car theft.”

Mr Carroll says that in the depressed vehicle market a huge number of vehicle owners already owe more money on their cars than they are worth. The gap between wholesale value and insured value provides an incentive for fraud when people get into financial difficulty.

He says underlying trends can be lost in national figures. Stolen unrecovered figures are starting to rise, particularly in NSW, but this is being offset by declines in the smaller states.

“NSW is 40% of whatever market you’re talking about,” Mr Carroll said. “If NSW theft rises, this tends to have an upward effect on national figures.”