France is facing a major fraud scandal involving illegally registered vehicles. France’s state auditor has revealed that nearly one million illegally registered cars are currently driving on French roads. Costing the government hundreds of millions of euros in lost taxes and fines.
The issue began in 2017, when the French government decided to partially privatize the vehicle registration system. The goal was to speed up the slow process of issuing registration papers to new car owners. About 2,000 government employees were reassigned.and car dealers were given direct access to the national vehicle registration database (SIV) so they could handle registrations themselves.
However, the system relied heavily on trust and had very little oversight. This created an opportunity for fraud. According to the Cour des Comptes, France’s state audit body, hundreds of dishonest operators took advantage of the system by creating fake or “ghost” car dealerships. These fictitious companies gained access to the registration database and began manipulating vehicle records for a fee.
The report estimates that nearly 300 fake companies registered around one million vehicles without proper government control. Although the registration documents look legitimate during roadside checks, police officers often cannot trace the vehicles or identify their owners afterward.
The financial impact is significant. Between 2022 and 2024 alone, the government lost about €550 million in unpaid registration fees and unpaid speeding and parking fines. Know More
Authorities have identified around 30 different types of fraud connected to the scheme. These include avoiding environmental taxes on highly polluting vehicles altering roadworthiness test results and hiding the identity of previous car owners.
Criminal groups have also exploited the system. Stolen vehicles can be re-registered to avoid detection. And drug traffickers have reportedly used these cars for high-speed transport operations on highways. Police initially became suspicious after noticing a 160% increase in extremely high-speed traffic violations between 2016 and 2022 which led investigators to discover that many of the vehicle registrations were fake. Read More
Auditors criticized the government for failing to properly verify the 30,000 dealers who had access to the registration database. In many cases, people simply created shell companies and applied for access. And authorities usually approved these requests without strict checks.
The French Interior Ministry has acknowledged the problem and says it is working on reforms. Last year, the government introduced an action plan that increased fraud detection efforts. And significantly reduced the number of businesses allowed to access the registration system.
