If Payment's Late, Car Won't Go

If Payment's Late, Car Won't Go
Coming to a "Buy-Here, Pay-Here" Car Dealer Near You Soon - MDJ

If payment's late, car won't go

Deborah Yao - Associated Press
Tuesday, June 13, 2006

Limerick, Pa. --- Rashida Redd punched in a six-digit code in her Pontiac Grand Prix and got a new lease on life.

The 34-year-old Pottstown, Pa., mother of five had to file for personal bankruptcy about a year ago in the face of mounting medical bills from her husband's open-heart surgery. Despite her poor credit history, Redd was able to lease the 3-year-old car on the condition that it have a starter-interrupt device.

"At least I was able to save the house," said Redd.

The device, the size of a cigarette pack and mounted under the dashboard, flashes green if she has made a car payment on time. If she misses her $94 weekly payment, it won't let her car start.

Starter-interrupt devices are becoming a popular way for lenders to ensure they get paid, and consumers seem willing to accept them to get into nicer cars, use a smaller down payment and qualify for a lower interest rate, according to device manufacturers.

Ken Shilson, managing partner at Shilson Goldberg Cheung & Associates in Houston, an accounting firm that works with auto dealers using the device, said the market for them is growing.

The major manufacturers of the device report double-digit increases in sales so far this year, compared with the same period a year ago. An estimated 1 million are in use today, he said.

Consumers with poor credit often are faced with interest rates of over 20 percent --- nearly triple the rate that drivers with good credit can get, Shilson said. They also have to pay a down payment equal to 10 percent to 20 percent of the car's purchase price, while buyers with good credit can purchase a vehicle with little or no money down.

Redd's car is equipped with a device made by Payment Protection Systems Inc. of Temecula, Calif. It's one of three manufacturers that dominate the market --- the others are PassTime of Littleton, Colo., and Pay Technologies of Cleveland.

The companies make a variation of the same device: The units are connected to the starter and emit a brief series of sounds or flashes of light, days before the payment deadline. If the customer then makes a timely payment, he or she can contact the dealer for a new code that will allow them to operate the vehicle. Some devices are remotely controlled by dealers.

Manufacturers say the device won't kill the engine while the car is being used; it will only stop the vehicle from starting. Also, consumers late on payments are allowed emergency starts, the companies say.

Shilson said the devices are mainly geared for the "buy here, pay here" market --- consumers with the lowest credit scores. Typically, these buyers have filed for bankruptcy or had a repossession.

"Buy here, pay here" customers also are limited to how expensive a car they can buy, typically $5,000.

Jack Gillis, a spokesman for the Consumer Federation of America and author of "The Car Book," doesn't like the idea of having a third party have control over a driver's vehicle.

"It's a rather draconian measure to take," he said. "What these companies are able to do is sell cars at virtually no risk to themselves, with all the risk to consumers."

Source - Atlanta Journal-Constitution

I REALLY don't like the idea of this..... it's an invasion of privacy for one, and how is it not in line with the Fair Debt and Collections Practices?

Now maybe some people would be ok with this, but I don't like I could do it....

And she's paying $96 a WEEK?! How much car did she buy from a 3 year old leaser?

Too "big brother" for me. On the other hand, if that's the only way you could get a vehicle, I can see why someone might opt for it.

So you think you should be able to drive a car you don't pay for? What's next? Taking laundry detergent from Wal-Mart without paying because you just have to have clean clothes? What's the difference?

with my luck, there would be a glitch in the thing and it wouldnt start even if I paid on time!

So you think you should be able to drive a car you don't pay for? What's next? Taking laundry detergent from Wal-Mart without paying because you just have to have clean clothes? What's the difference?

Excuse me, but was this directed at me?

It's directed at anyone who thinks that they should be allowed to drive a car they don't pay for.

NO ONE was saying that, Jenny. Once again with the holier than thou attitude. ***sigh***

If thinking that driving a car one doesn't pay for makes me "holier than thou", then I wear that with pride.

tinroof seems to take exception with the idea. Invasion of privacy. I don't recall reading the amendment to the Constitution that says a person has the right to drive a car they don't own or pay to use.

What if everyone that buys their detergent using a credit card needs a special code to open the bottle each time they do a load of wash to see if they've paid off a sufficient amount of their credit card?

JENNY:The problem is, that you only interject when you can be condescending or judgemental, or so it appears. If just once it appeared that you were actually just being helpful, it would be different. Perhaps you dont realize you come across this way, but I believe you do, because it has been pointed out many times.

No one here said they want a car they dont pay for. They are just discussing a topic.

JENNY:The problem is, that you only interject when you can be condescending or judgemental, or so it appears. If just once it appeared that you were actually just being helpful, it would be different. Perhaps you dont realize you come across this way, but I believe you do, because it has been pointed out many times.

No one here said they want a car they dont pay for. They are just discussing a topic.

Ignore it... it's probably some 35 year old jerk living in its parents basement it's spouse left it, it reads comic books all day, and dreams of a real life, and substitutes its own by trying to make other people feel badly about themselves.

Jenny- I don't recall a single person here stating that they wouldn't be paying for their car loan. If you could lean to read properly, and not be such a condescending jerk, you would understand that 90% of us here didn't file simply because we "don't or won't pay our bills." There were extenuating circumstances that lead us to that point in our lives.

And quite frankly, I'd thank you to shut your mouth about it. This is getting really old....

[QUOTE=tinroofrusted]Ignore it... it's probably some 35 year old jerk living in its parents basement it's spouse left it, it reads comic books all day, and dreams of a real life, and substitutes its own by trying to make other people feel badly about themselves.

Exactly, either that or its the twin of queerguy, deliberately making statements to ruffle feathers and then innocently acting like they had no idea it would be offensive....