Organised crime groups are stealing cars from Australian roads, shipping them overseas and stripping them down to sell the parts in Iran and Russia, insurers have warned, as sanctions make the black market for parts increasingly lucrative.
The revelation from the Insurance Council of Australia comes amid fresh data showing Melbourne remains Australia’s vehicle theft epicentre. This is propelled by petty crime as well as organised syndicates packing stolen cars into shipping containers, sending them to intermediary ports to bypass detection before forwarding them to sanctioned nations.
Victoria recorded over 12,300 car-theft claims in the 2025-26 financial year, costing insurers $244.3 million. While the number of theft claims remained stable, total costs grew by more than $21 million. More cars are stolen or broken into in Melbourne than in all other capital cities combined.
Queensland motorists lodged 6200 theft claims costing $113 million, while there were roughly 5500 claims costing $98.7 million in NSW. In Western Australia, about 3500 claims cost $22 million. Nationally, the financial toll of car thefts exceeded half a billion dollars.
Insurance Council chief executive Andrew Hall said that while car theft includes joyriding and domestic re-selling, insurers believe a growing proportion of vehicles are stolen specifically for overseas export.
Hall noted insurers report that two-thirds of vehicles stolen in Melbourne are never recovered locally and that detections of Australian-registered vehicle parts overseas have increased.
Throughout the year, Victorian and Queensland police have raided shipping containers at Melbourne and Brisbane ports and at wrecking yards, uncovering hidden stolen vehicles. Authorities have also made a string of arrests linked to an international crime syndicate that has illegally shipped tens of millions of dollars worth of stolen cars to the United Arab Emirates.
In an interview with this masthead, Hall revealed that insurers had since formed the belief that after arriving in the UAE on illegal shipments, the cars were being dismantled for parts to be sent primarily to Iran and Russia. A lucrative market for second-hand replacement components has emerged because sanctions prohibit manufacturers from selling legitimate parts to repairers in those countries.
“Australia has become part of a global supply chain for sanctioned nations,” Hall said. While some crime groups have been busted by police, he said the broader problem was ongoing.
“We’ve got examples of authorities overseas finding shipping containers of Victorian registered vehicles in the UAE,” he said.
“We don’t check things that leave the country.”
He noted that since local car manufacturing ended, any shipping container full of cars leaving Australia should raise suspicion. Discovering right-hand drive models (made for left side of road driving systems) at Australian ports destined for left-hand drive countries is a telltale sign that they are illegitimate shipments destined to be dismantled.
Common Japanese and Korean-manufactured brands are among the most targeted due to their prominence among Iranian and Russian motorists, Hall said.
Australia’s relatively open supply chain, which similarly enabled an influx of illicit tobacco, is a key factor attracting organised criminals to car smuggling, Hall said.
Syndicate leaders are hiring teenagers to steal cars because they can be paid less and face more lenient judicial consequences, Hall said. His comments echo concerns from NSW police that local crime groups are adopting European gang tactics, relying on teenage boys to take great risks for a fraction of adult costs.
“It’s teenagers, they’ve got no consequences in their mind, and can earn $1000 stealing a car and delivering it to a drop-off point,” Hall said. “They might get arrested, but get bailed and do it again, bailed and do it again.”
Modern cars with proximity keys that do not need to be put into the ignition have become easier targets. Thieves use specialist devices to amplify the signal from a key inside a house to unlock the car parked outside. This vulnerability has led to a rise in the use of manual steering wheel locks.
“Once the cars are offshore, it just costs too much for insurers to do anything,” Hall said.
The council is calling on stricter monitoring of exports as well as stronger policing and better use of intelligence, especially in Victoria, to crack down on the problem.
“One of the things we can control is crime. There is a sweet spot you can achieve between policing and the judicial system that brings downward pressure on car crime,” Hall said, adding that the next Victorian government must not accept this as the new normal.
Ultimately, the increasing burden of paying out car-theft claims is inflating the premiums insurers charge all motorists, which jumped by about 50 per cent between 2019 and 2025.
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Elias Visontay is a National Consumer Affairs Reporter at The Sydney Morning Herald and The Age.Connect via email.From our partners
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