Test drives are one of the most important steps in the car-buying journey. They turn casual interest into real buying intent. But for dealerships, they also present one of the riskiest points in the sales process. Vehicle theft, identity fraud, and false customer data are becoming more common during test drives, leaving dealers exposed to losses and compliance risks.

Key Takeaways

• Test drive fraud drops fast when you verify identity before handing over keys (ID plus driver’s license, matched to the same person).
• Require a signed test drive agreement that states time limits, route rules, and return conditions in plain language.
• Log every test drive with a consistent checklist (who drove, when, which vehicle, and staff approval) so there’s a clean audit trail.
• Use location and time controls (like geofencing and return-by times) to spot risky behavior early and respond faster.
• Train staff on one standard process, because inconsistent steps create easy loopholes.

The good news? New digital identity verification tools are making test drives safer and more efficient. With solutions like AVA™ Drive, you can reduce fraud, streamline scheduling, and generate more high-intent leads, all while giving customers a better experience.

The Growing Problem of Test Drive Fraud

In today’s retail environment, fraud is rising fast. Recent data shows that auto retail fraud is up more than 28% year-over-year. And test drives are one of the easiest opportunities for fraudsters:

• Customers provide fake or stolen IDs at the dealership
• Salespeople miss red flags during manual ID checks
• Vehicles are taken on test drives and never returned

For dealerships, even one incident can mean massive losses and reputational damage. Manual ID checks are no longer enough to protect your inventory or your customers.

Why Traditional Test Drive Processes Fall Short

Most dealerships still rely on outdated methods for verifying test drive customers:

• Photocopying or visually checking driver’s licenses
• Relying on sales staff to “trust their gut”
• Collecting incomplete customer data before handing over the keys

These methods are slow, inconsistent, and prone to human error. Worse, they put your dealership at risk of fraud, compliance violations, and lost revenue.

How AVA™ Drive Works

AVA™ Drive transforms how dealerships handle test drives by combining digital identity verification with online booking. Here’s how it works step by step:

1. Customer Requests a Test Drive
   From your website, a landing page, or in-store, the customer submits a request to book a test drive.
2. Instant ID Verification
   The customer receives a secure text message prompting them to verify their identity. They scan their driver’s license and take a quick selfie using their phone.
3. Fraud Check & Verification
   AVA™ Drive instantly checks the ID for authenticity, ensuring the person matches the document. This eliminates fake IDs or impersonators.
4. Dealer Gets Notified
   Once verified, your team receives an alert that the customer is legitimate and the test drive is scheduled.
5. High-Intent Lead Captured
   You now have verified, accurate lead data tied to the appointment, no guesswork or wasted time.

Benefits of Using AVA™ Drive

• Reduce Fraud Risk: Instantly confirm that a customer is who they say they are before handing over the keys.
• Save Time: Automate ID verification and scheduling, freeing up staff to focus on selling.
• Build Customer Trust: Offer a frictionless, modern process that shows buyers you value security and convenience.
• Increase High-Intent Leads: Verified customers are more serious buyers, helping your team close more deals.
• Stay Compliant: Meet evolving FINTRAC KYC requirements in Canada and U.S. ID verification standards.

Why Test Drive Fraud Prevention Matters More in 2025

With more buyers starting their journey online, dealerships can no longer rely on in-person manual ID checks alone. Digital fraudsters are more sophisticated, and customer expectations for convenience are higher than ever. AVA™ Drive gives you both, security for your dealership and a seamless experience for your buyers.

Frequently Asked Questions About Test Drive Fraud Prevention

What counts as test drive fraud at a dealership?

Test drive fraud is any attempt to misuse a test drive to steal a vehicle, fake an identity, swap plates, avoid returning the car, or damage the vehicle and disappear. It also includes using false info to get access to keys or inventory.

What is the best way to verify a customer before a test drive?

Use a simple, repeatable identity check: confirm a valid driver’s license, match it to a second ID when needed, and verify the person in front of you matches the documents. Record the verification step in your test drive log so it is not just “done,” it is provable.

What should a test drive agreement include to reduce fraud?

Include the driver’s name, date and time out, return-by time, approved route or boundaries, who is liable for tickets or damage, and what happens if the vehicle is not returned. Keep it short and readable so customers and staff both follow it.

How do geofencing and time limits reduce test drive risk?

They set clear guardrails. If the vehicle leaves an approved area or is not back by the agreed time, staff can act right away instead of finding out hours later. Faster alerts usually mean fewer losses.

How do you reduce fraud without making customers feel accused?

Make the process sound standard, because it should be standard. Use the same steps for everyone, explain it as a safety and insurance requirement, and keep the steps quick. Friendly tone, firm process.

Final Thoughts

Test drives don’t need to be a point of risk for your dealership. By adopting tools like AVA™ Drive, you can prevent fraud, protect your inventory, and create a more trustworthy buying journey.

Want to see how AVA™ Drive can transform your test drive process?

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👉 Book a Demo Today and discover how easy it is to protect your dealership while generating higher-quality leads.