Cartels have been using a simple method to steal hundreds of rental cars from Texas to use in Mexico. They use social media to recruit a driver with a U.S. license. This driver rents a car with maximum insurance coverage (called a Collision Damage Waiver). Then they simply hand the keys over to a cartel smuggler in the U.S.. Or they leave the keys in the car at an agreed-upon parking spot. The Texas government is suggesting a simple change to the law. Insurance doesn’t have to cover your “stolen” rental car if you don’t have the keys.

The epidemic of cartels stealing rental cars

The car rental company that owns Enterprise, National, and Alamo reported just how bad the problem is. “In fiscal year 23–24 alone, over 100 unrecovered vehicles from its Houston and San Antonio regions were confirmed by license plate readers as crossing the border. Over 70% of those vehicles had an active CDW, leaving rental companies with no recourse for recovery.”

That’s just the confirmed thefts in one area. Craig Sepich of the National Insurance Crime Bureau said, “It’s just the most you know, brazen type of crime.” This “brazen” crime is far from victimless. “Analysis that we’ve conducted, you know, currently has San Antonio ranked as 18th in the nation for metropolitan areas, for vehicle theft rates, that’s going to have a huge impact on people in those communities.” Statistics like that paint a target on a city’s back, and also drive up insurance premium rates for everyone.

Texas Representative John Lujan agrees the rental car theft epidemic leads to higher premiums that hurt us all. “At the end of the day, they might steal a car, they might steal money from these insurance companies, but the ones that truly pay for it are us, the ones that are who are honest, law-abiding citizens, we’re paying for this criminal activity. We’re paying for this racket, you know, it’s so the insurance that they get already can be taken away if they get caught…”

Closing the insurance loophole cartels use to steal rental cars

Representative Lujan proposed a bill to close this loophole. Under his new bill, a renter with a stolen car would need to file a police report within 24 hours, return the car keys to the rental company, and cooperate with the rental company and law enforcement agencies investigating the theft. Otherwise, they could be liable for the stolen car.

When Sheriff Martin Cuellar began fighting this epidemic in 2019, the police officer felt it was his duy. “There’s been some real bad gun battles in Nuevo Laredo, and we’re doing our jobs by keeping this vehicle from going south and being utilized by the cartels.”

Craig Sepich (NICB) believes Rep Lujan’s bill is the way to finally end this years-long epidemic. “It’s kind of addressing that shortcoming, you know, where people may not have been as forthright in working with investigators, the law enforcement rental car agency, and just tightening up those parameters to ensure that people are not intentionally exploiting loopholes.”