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Loss Prevention Bulletins

Dealer Plate Access Control Systems

Most auto dealers today understand the importance of vehicle key control management; a lost or stolen key could lead to the theft of a vehicle. Equally as important is dealer plate management. The unreported loss or misuse of dealer plates by an employee presents a large liability exposure which can put the assets and reputation of a dealership at risk.

Despite this risk, many dealers still don’t control access to their dealer plates. It is important to note that a number of states, such as Kansas¹, place restrictions on the use of dealer plates by employees and customers. The licensed dealer alone is responsible for maintaining control and accountability of dealer plates at all times. Since employees are not legally responsible for dealer plates, they should not be allowed to control access to them. They should be in possession of dealer plates only when required for dealer business.

The best way to manage access to dealer plates is to implement a dealer plate control system.

The two primary goals of any dealer plate control system are to:
1. Secure dealer plates
2. Control access to dealer plates

Secure dealer plates

When plates are not being used, they should be secured at all times. At a minimum they should be locked inside an office; ideally they should be locked in a safe or steel cabinet somewhere on the dealer premises. In addition, it is important to reduce the number of plates at the dealership to the minimum required to do business. Many dealerships simply have many more plates than they really need. It is much easier to maintain control over a smaller number of plates as opposed to a larger number. Regardless of the number of plates a dealer has, securing the plates is the first and most important goal of a dealer plate control system.

Control access to dealer plates

After dealer plates are secured, it is important to implement a system to control access to them. With any system, one employee should be assigned responsibility for access to plates.

Without establishing a single point of accountability, an effective dealer plate control system will not succeed. An ideal system should be able to identify what set of plates were assigned to which employee, or who had the missing plate last. There are different levels of systems to choose from, from basic to more advanced, and they don’t have to be expensive or complicated.

Basic System: A basic system that designates one employee to restrict access to plates can be sufficient if implemented properly. The responsible individual should maintain a log that documents who checked the plate out, the date, time, reason the plate was needed, and when it was returned. This log should be reviewed throughout the day to ensure all plates are accounted for, and if not being used, have been returned.

Automated System: These systems require employees to input a code or use finger print recognition to access dealer plates. All pertinent “transaction” data is also recorded automatically, which the system can then use to produce dealer plate reports to be reviewed and reconciled by a designated employee. Dealers who already have automated key control management systems typically can upgrade their system to handle dealer plates.

Manufactured System: This type of system controls access to dealer plates by requiring employees to access them using individually numbered keys. Each employee is assigned an individually numbered key and a master list of key numbers is maintained by a designated employee. These systems limit access, and by cross referencing the key number, can pinpoint who has possession of plates at any time. Unlike automated systems that are capable of producing a report to reconcile plates, these systems need to be manually reconciled by the assigned employee to verify plates are being returned.

Implementing a successful dealer plate control system is highly recommended and has many benefits that can affect your bottom line. Securing plates and restricting access to them can reduce your exposure to liability, prevent losses, and most importantly, lower the cost of insurance. Protect your dealership by implementing a dealer plate control system today.

¹http://kansasstatutes.lesterama.org/Chapter_8/Article_24/8-2406.html

If you have any questions or comments, contact your Zurich account executive or the Risk Engineering Department at 800-821-7803.

This bulletin in pdf format:

LC-148 DLR 04-09 Š2009 Zurich American Insurance Company

This Loss Prevention Bulletin is provided for informational purposes only. Please consult with qualified legal counsel to address your particular circumstances and needs. Zurich is not providing legal advice and assumes no liability concerning the information set forth above.

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