France’s ghost car scandal that allowed one million illegal vehicles onto the roads

France’s Ghost Car Scandal That Allowed One Million Illegal Vehicles Onto the Roads

A major tax evasion scheme has seen nearly a million cars driven without proper registration in France, according to a report by the state auditor. This illegal activity has led to significant financial losses, with hundreds of millions of euros in uncollected taxes and penalties. The scandal also involves fake dealerships manipulating records of the state vehicle licensing agency (SIV), which has resulted in unsafe vehicles and lorries being added to the roadways.

Initiated in 2017, the scheme was part of a government effort to streamline the registration process. By partially privatizing the system, 2,000 civil servants were reassigned, and car dealers gained direct access to the SIV registry to issue documents for their customers. However, this shift relied heavily on the assumption that all participants acted in good faith, a flaw that enabled widespread fraud.

The report from Cour des Comptes highlights that over 300 “fictitious companies” operated without state oversight, registering vehicles that were later untraceable. These shell firms exploited the system to manipulate paperwork, creating a loophole that allowed fraudulent activities. “The financial loss alone between 2022 and 2024 reached €550 million due to missed registration fees and fines for speeding and parking violations,” the report stated.

Exploiting the System for Criminal Ends

“Vulnerabilities have allowed the whole gamut of criminality – from petty delinquency to organized crime – to penetrate the registration system in order to pursue their fraudulent ends,”

noted the Cour des Comptes. The scam includes tactics such as evading environmental taxes on high-emission vehicles, falsifying roadworthiness test results, and concealing prior owners’ identities.

Le Monde reported on a case where a SIV-eur, as fraudsters are known to police, helped a luxury car importer avoid substantial import and environmental taxes. By classifying Rolls-Royces and Mercedes as vehicles adapted for disabled individuals, the importer gained exemption from duties. Similarly, stolen cars can be re-registered through these schemes, making them difficult to trace.

Le Figaro highlighted a surge in speeding violations, with “very fast” offenses increasing by 160% between 2016 and 2022. Police investigations revealed that many of these vehicles had been faked, linking the rise in incidents to the registration fraud. The state’s failure to verify the credentials of 30,000 dealers who accessed the SIV was a key oversight, according to the report.

“This is what happens when you try to reduce the size of the state. Before, people had to queue for two hours for their papers. Everyone complained, but at least everything was properly checked,”

France’s interior ministry acknowledged the issue and announced steps to address it. A recent action plan has boosted fraud detections, while the number of SIV access authorizations has dropped sharply. The ministry is working to tighten regulations and restore oversight to prevent further exploitation of the system.