U.S. auto dealers surveyed for Experian’s 2026 Dealer Fraud Threat Report closed an average of four deals that were later revealed to be fraudulent last year, with nearly one-third (31%) reporting each bad transaction cost their dealership more than $20,000.

Analysts note most respondents did get partial relief from insurance (64%) and finance sources (67%), but many bore 100% of the cost.

“When one fraudulent transaction can wipe out tens of thousands of dollars in profit, it’s simply too big to ignore,” writes Jim Maguire, Experian’s senior director for automotive, in a release. “These losses will eventually cut directly into a dealer’s margin and put serious strain on their operations, making it harder to stay profitable.”

Income-related fraud remains the most popular type, particularly in the form of forged documents (encountered by 62% of respondents) and fabricated claims (50%). Despite the wide and growing availability of digital verification tools, most dealers still use scanners (67%) or photocopiers (63%) to capture driver’s licenses, and nearly half (46%) said they only validate income when “something seems ‘off.’”

Read the full report at Experian