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Miss a Payment? Good Luck Moving That Car.

This article describes how some car loan lenders are using a remotely activated device in a vehicle’s dashboard to control the vehicle’s ability to start, as a method of coercing delinquent payments out of the vehicle’s owners. The authors describe how auto loans to borrowers considered subprime have been increasing recently as has the use of starter interrupt devices to remotely disable the ignition of cars outfitted with these devices. In addition, most of the starter interrupt devices also have GPS technology, so the lenders can track the location and movement of the vehicles. These devices have been installed in approximately two million vehicles, marking a trend that is being applied in nearly 25% of subprime auto loans nationwide. The authors report on the inconvenience and problems that car owners have faced when the ignition interrupt devices are used; the privacy implications of the loan company knowing the movements and location of private individuals; how easy it is for the “repo man,” who can now disable vehicles remotely and locate the collateral (the vehicle); the differences between lenders who have standard guidelines in place, typically to work with the borrower, versus those lenders who give no advance notice of a shut-off; the societal implications of socioeconomically disadvantaged persons having to cope with audible alarms in their vehicles when only a day or two late with their payment; the economic benefits that have accrued to the devices’ manufacturers; the availability of emergency codes to restart a vehicle for 24 hours; state laws governing repossession; and potential safety hazards. The article is one in a series of articles about the boom in subprime auto loans.

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 01546277
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 2 2014 2:03PM