New cars, vans, light trucks and SUVs built in Canada must be equipped with anti-theft engine immobilizers, Transport Canada has decided.

The new regulation went into effect on Saturday.

The ignition immobilizer chip, which fits inside a car key, can reduce auto insurance costs.
(CBC)

Immobilizers are devices that prevent vehicles from starting without keys, thus preventing hot-wiring — starting a car's engine by bypassing the ignition system.

An engine with an immobilizer won't start until it recognizes a computer chip in the ignition key.

Owners of vehicles with immobilizers can expect lower insurance premiums, but those with higher-priced models should be careful where they keep their keys after they park. Organized theft rings targeting luxury cars have been known to break into homes in search of keys to deactivate immobilizers, says Rick Dubin of the Insurance Bureau of Canada.

Auto theft costs Canadians at least $1.2 billion per year, taking into account legal and insurance costs, as well as health care for crime-related injuries, the insurance bureau says.

About 159,000 vehicles were stolen last year, a slight decline from previous years. About half of them end up in "chop shops," where they're dismantled into parts to be sold off separately.

However, a Montreal-based auto-tracking company is questioning the effectiveness of the new regulation. 

Boomerang Tracking Inc. says a study it conducted from 2003-2007 showed 36 per cent of stolen vehicles the company recovered had Insurance Bureau of Canada-approved immobilizer devices.

Professional thieves will still be able to make off with cars by simply towing them or lifting them on to flatbed trucks, the company says.