The auto lending market is feeling the strain. Loan balances in the U.S. have climbed to $1.66 trillion*, and delinquencies are on the rise. Most lenders are used to dealing with missed payments or charge-offs, but there’s a newer problem creating even bigger headaches: bust-out fraud.
Bust-out fraud may look like an ordinary delinquency, but the intent is very different. The borrower never intended to pay in the first place.
At first glance, these cases don’t appear suspicious. The borrower has decent credit, no signs of identity theft, and nothing unusual when the loan was approved. Then the payments stop. Calls go unanswered. The address on file doesn’t check out. Before long, the borrower has disappeared, often with the vehicle, leaving the lender in a lurch.
Why Bust-Out Fraud is Spreading
Several factors are making this type of fraud more common:
- Rising living costs and higher interest rates are putting borrowers under pressure, making fraud seem like a way out.
- Traditional credit data and contact records don’t always capture early warning signs. Compounding the challenge, fraudsters are increasingly leveraging AI-driven tools such as synthetic identity generators, deepfake videos, and counterfeit documents to execute bust-out schemes more convincingly and at scale. In fact, one 2025 industry analysis identified a 644%* increase in criminal discussions around AI fraud tactics between 2023 and 2024, underscoring a rapidly evolving threat landscape.
Vehicles are mobile and easy to hide, which shortens the window for recovery.
In other words, lenders are dealing with borrowers who look fine on paper but walk away the moment it suits them. By the time anyone realizes what’s happening, the chances of recovery are already slim.
The Risk for Lenders
The biggest problem with bust-out fraud is timing. Traditional collections models assume the borrower wants to pay but is struggling. Fraudsters, on the other hand, have no intention of paying. That difference makes early detection critical.
If a lender waits until an account is officially delinquent, it may already be too late. The borrower is gone, the vehicle is gone, and the loss is locked in.
How DRNsights Fills the Gaps
That’s where DRNsights for Lending comes into play. Built on the nation’s largest vehicle intelligence platform and fueled by more than 500 million monthly license plate recognition scans, DRNsights gives lenders a way to see what traditional data cannot.
With DRNsights, lenders can:
- Flag unusual borrower activity early through Portfolio Analytics and Risk Scoring.
- Use skip tracing tools that combine LPR sightings with public records to confirm what’s really happening.
- Track vehicles in real time across the country, improving the chances of recovery before they disappear.
Receive alerts when vehicles are impounded, stolen, or exported, which helps protect value before it’s lost.
Proof in the Numbers
The approach works. Since 2009, DRNsights has helped recover more than 2.8 million vehicles and protect over $28 billion in value. More than 300 financial institutions now rely on this intelligence to manage risk, recover assets, and protect their bottom line.
The reality is that bust-out fraud is growing, and traditional borrower data isn’t enough to stop it. DRNsights closes the gap, helping lenders turn what used to be blind spots into opportunities for action.
Final Word
Bust-out fraud is one of the most damaging trends in auto finance, and it isn’t going away anytime soon. For lenders, the choice is clear: keep relying on limited borrower data and risk mounting losses, or use vehicle intelligence to get ahead of the problem.
With DRNsights, lenders gain the visibility and speed they need to fight back.