Is this for everyone or just ones with bad credit.

Does that mean the other 70% of those that default on their loans just don't seem to mind the noise?

Let's hope these aren't powered by Microsoft's WGA code - otherwise expect a lot of false positives and cars coming to a screeching halt on a freeway near you! Gives a whole new meaning to software crash.

That's the best they can do? Come on, some company has got to come up with a device that shocks you when you put your key in the ignition if you're past due.

The article reports "Sekurus is continuing to introduce products. The latest enhancement is coupling the keypad to a global positioning device. Not only will the car's starter automatically shut off, but a message will go to the loan holder with its location to make repossession easier."

A GPS device that follows drivers seems like an invasion of privacy to me.

@DeafLEGO: from the article "That's the reality for millions of subprime borrowers whose used car purchase is contingent upon having an unusual option"

@juniper: My brother's an auto mechanic, when black boxes came out he used to say "If it's got wires going into it, and wires coming out of it, I can bypass it." :)

Let's hope it is smart enough to disable the car *after* the next time it is shut off and not while it's moving. :D

Unless it is written into the contract, and specifically signed for, these are illegal.

Car sharing programs, like ZipCar, where the key is stored in the car, use similar computers to control the engines on their cars so that only authorized people can turn them on. They won't shut off the car in the middle of the highway, or even when you are stopped at a light, it only controls the engine when it is first turned on.

↑ ↑ ↓ ↓ ← → ← → B A

@Jinx:
Please cite the law this breaks. If the bank owns the car, they can certainly make modifications to their property as they see fit.

ANDDDDDD what happens when the car strands some poor schmoe out in the middle of some desolate winter mountain pass in the middle of a blizzard?

@discounteggroll:
Excellent. The Konami Code prevails again.

Your car will self destruct in 3...2...1...

Awesome, do this to mortgaged houses. Forget a payment and make the home unlivable.

As forgottenpassword mentioned, I can see this getting someone into a dangerous situation and thus setting the scene for a massive lawsuit.

I knew of someone who had one of these (a friend of a friend). She and her husband had declared bankruptcy 2 times and when I met them, they were contemplating declaring a third time. One time before their monthly payment was due, the wife called my friend asking for a loan to pay the car note or they were going to shut her car off. That was the first I had ever heard of such a thing. Needless to say, my friend was smart enough not to loan her the money, the car was shut off and the woman just borrowed money from someone else. A few weeks later the next time I saw her, she was showing off her new Coach handbag she had just bought. Some people will never, ever, learn.

OMFG, it's like house arrest for your car. Get real, it's not going to be that hard to bypass this thing.

great, i have no money to make the payment, but i will next week if i can get to work tonight. the car wont start and noone can give me a ride. now im broke, unemployed, have no car (but still have to pay the difference) cant get into town to get a new job.

um, not in my car

Imagine an apartment building that has electronic locks on all the windows & doors that lock the moment your rent is due & wont let you back in!

I hate draconian shit like this. And I am a person who is financially responsible, has no debt & pays his bills like clockwork.

Welcome to tomorrow. This device protects the auto loan industry. The reason we pay high premiums is because people default. This way the auto loan industry gets to do both. I think not only is this anti consumer, i think that if the terms of the loan require that you get one of these devices you should refuse this loan, unless it offers a "reduced risk" discount.

@myotheralt: Then you shouldnt have bought a new car that was out of your price range.

This is a great idea.

To the stupid argument of being stuck in a dangerous situation all I can say is when you know your bill is due and that you are not going to pay it then DON'T DRIVE INTO A DANGEROUS SITUATION. This thing beeps for a whole day to tell you that it will shut off your car.

Oh yeah that's a good idea, miss a payment, turn their car off and you'll never get another one.

Am I the only one who sees this as a self-destructive plan?

Pay your bills on time and you won't have to worry about it.

I pay all of my bills on time and never miss any payments...

BUT if I was told they were gonna install this on my car (after I signed everything that is), I'd laugh all the way to the toolbox.

Just great. I would hate to get screwed by this. Hasn't anyone here had problems with banks getting payments?

If what happened to my Home Equity loan happend to my car loan, they would of shut off my car. I paid GMAC for 2 months, They never got a payment from me though. But the money was electronically sent to them. The error was on there end. See The money was not in my account, and it WAS sent to them. But it was in GMAC limbo and not my account. Took 3 months to finally fix.

@TheUncleBob:
Exactly. The only people this will effect are those who a) have such poor credit (Read: High risk) and b) contractually agree to it as a condition of buying the car. I think this is a great way for the lending industry to protect itself against high-risk loans, while still allowing those people to buy cars. If they live up to their end of the bargain, no problems. If they don't, they deserve it.

@r081984: Yeah, because danger has a big shiny sign saying 'Danger here!' so we all know where it is at all times. Why didn't I think of that?

To add some perspective to this, let's have some first hand experience. I bought a van from a BHPH back in 2002 which came with a similar (but older) system.

First, the brain of the system was mounted under the dashboard. The only visible part was a 1 inch lead with an IR sensor near my headlight switch, and the remote for the system, which lived in my glove box.

Every week that I made a payment, I was given a 6 digit code to enter. Once I typed the code in, the system beeped twice and that was all I had to do.

If I was late making a payment, the system would begin beeping for about 1 minute after the car was started. 24 hours later, the car would fail to start, and the system would beep every few seconds.

At no time would the car stall on the road - The system only controls the initial startup of the engine.

If it was an emergency, I had a code that I could use to override the system a single time for 24 hours.

It had no GPS tracking or triangulation systems to locate the van, so my privacy was protected.

It also served as a passive anti-theft system, which got me a discount off the insurance. (There is a sequence that must be used when starting the van, otherwise the system will make it appear that the battery is dead.)

If I had a need to let someone else drive the van, I could enter a pin on the remote and press the valet button which would disable the entire system for a few hours. (I forget how long..)

All in all, it was a very unobtrusive system, and it allowed the BHPH to give me a very nice van for what I was paying. Without it, they could have given me a much crappier vehicle, as a way of protecting themselves from excessive loss if I failed to pay.

It reduces default rates by 83%, not 30%: "The device lowers default rates for subprime auto loan borrowers that typically run about 30% to about 5%."

I don't know if I hate this thing or like it. I pay my bills on time, but sometimes I rarely completely forget to pay one. I certainly would not want my car to not start because I haven't paid (even though it "warns" me...) What if I've been traveling so did not see the warnings when I went to the Airport and parked my car?

People need to be financially responsible, but this seems to be too much. Don't they already rape people with high rates if they have poor credit? Uncalled for and unfair to those who already pay the most for credit.

I'm all for people paying their debts, but devices like this seem too draconian for my tastes. What's next? The car will lock you in and not let you out until you insert your credit card?

Somehow it seems that the simple answer to this is don't lend money to people who don't pay their bills and not some gagdget that chips away at our personal privacy.

Think about it. We've been told for forever that finance charges are high to make up for losses by people who don't pay their bills. That's just built into the cost so there. Well, now that this device is here rates should drop like a rock right? Wrong. This business will most likely keep those savings as profit, which means that they are using this as a tool to offset their losses by impinging on our rights.

That's what's wrong with our country. Just because you find some group of morons who will let you degrade them for the sake of money, doesn't mean that it's okay. Even worse, it contributes to the decay of society. Eventually these things will become the norm.

I would ride a bicycle before I would allow this kind of garbage in my vehicle.

@discounteggroll: Haha, that made my day. Errm, evening.

Are these different than the ones they had about 2-3 years ago. I worked at the safe house and a guy in there disabled one for one of the guards.

@vitonfluorcarbon

"What if I've been traveling so did not see the warnings when I went to the Airport and parked my car?"

Then I hope you arranged to have the car loan paid on while you were travelling!

Seriously though.. Most of these devices, such as the one that was on a vehicle I owned, had a one-time use emergency code that gave you 24 hours of vehicle operation if you needed it.

Beyond that, you're screwed, and if you don't pay your bills, that's the way it should be!

This is such a good idea because sub prime auto lenders who prey on the high risk usually poor buyers are such honest businesses to begin with.

I would rather see some more community based borrowing that uses another form of assuring high risk borrowers pay than letting skeezy used car operations take away more rights from people.
Community lending tied to consumer education workshops combined with draws taken out of paychecks would be a better option.

@thesabre: By that logic, if the bank owns your house, they can come in and do anything they like in it if they want?

The bank loans you money. The car is simply collateral for that money. The car doesn't belong to the bank unless you STOP paying on the loan. Yes, I CAN cite laws regarding when a loan or mortgage holder can access their property once the buyer is in default.

@discounteggroll: I remember it as uu dd lr lr ba ba select start.

@aaron8301: The car doesn't belong to the bank unless you STOP paying on the loan.

Here I thought that's what this article was about. That's why I said they own the car, because the article clearly discusses when you don't make payments. Not random times throughout the day. Not on Tuesday and Wednesday... but when you don't pay for it.

Hence, I stand by my comment. When you don't pay for it, they can do whatever the hell they want with their car.

@aaron8301: The car doesn't belong to the bank unless you STOP paying on the loan.

Silly me, that's what I thought this article was about. You don't pay for it, they shut it off. That's why I said it's their property because the article is specifically about not paying for it.

I guess the idea stemmed from having to take a breathalizer test to start a car?

It does make sense though. If you don't pay your cable/utility or other such bill, they turn your services off. It's not really that different.

@aaron8301: the "select" and "start" were never part of the code. That part just starts the game and switches player count.

@SweetBearCub:LOLs "un-obtrusive".

Every week that I made a payment, I was given a 6 digit code to enter...
If it was an emergency, I had a code that I could use to override the system...
There is a sequence that must be used when starting the van...
If I had a need to let someone else drive the van, I could enter a pin on the remote and press the valet button...

How is all of that required, and unique code-entering "un-obtrusive"? Why, it's the very definition of "obtrusive".

@bohemian: I agree.

Plus can't spend it if you don't have it

@differcult: then i guess you have been in perfect health all of your life and never been sick, had a loved one die unexpectedly, been laid off, had a natural disaster come and rob you of ALL of your belongings, INCLUDING YOUR JOB. I have folks at Enron, and citizens of New Orleans who BEG to differ.

Your narrow-minded callousness is disturbing at the least

This is a sign that the days of completely owning the things you buy are coming to an end.

As of now, it's with digital media.

I really hope it doesn't get to the point when cars equipped with these are the only things you can get your hands on.

i would never accept a car that had something like this attached to it. NEVER. I would find another way to get myself a new car.

What's the difference between this piece of junk and an ankle bracelet mandated by a court?

It's not mandated by a court, but you're treated as a criminal anyway.

Interesting device. Works well in theory. But what if the device malfunctions? What if you pay your bill, enter the code, and your car still won't start? Something tells me the loan company isn't going to foot the bill for towing your car someplace to have the box repaired. No, this is a terrible idea.

@P_Smith: The difference is that one is a consequence of having committed a crime and you are compelled to wear it. This is not something you are coerced into. You are free to find another lender, or not buy a car.

They are similar in that you should have thought of the consequences of having bad credit/of having committed a crime, however.

@corporateamericabites: Well, that's the problem. Why do you need a NEW one if your credit is so bad that you get offered a car only if you accept one of these, from lender X? Find an inexpensive used one for a few grand...

@Tolgak: Er, correct, these are only placed in cars that you don't completely own. Cars that you pay for in full wouldn't come equipped with this. To whom would you owe obligation? If anyone is thinking the state, then think twice.

I'd love to see exactly how they intend to stop people from just ripping the box out. Or, better yet, neutering it. How long will it be before we see tutorials online for this?

This part in the article really caught my eye:

"Another competitor is PassTime USA in Littleton, Colo., which uses a mix of keypad and wireless systems. President Frank Jacobsen says he thinks the credit crunch will "make a difference" in sales, along with payments from the federal economic stimulus package that could boost car buying."

My God, I hope the stimulus *doesn't* boost car buying! Just what we need, more people jumping on the heap of bad credit.

Some of you act as if these customers should be offended by the implication these things create. They know that they can't walk into a new car lot and buy anything. They are the one's that put themselves in these financial situations. Matter of fact, half of them don't even care about their own financial situations. Why else would they be shopping a car lots that advertise "We Tote the Note" and "Buy Here, Pay Here"?

They just want to get a car for a few months. Then they'll stop paying the note and the "repo man" will come and get it back. The person that'll really lose out is the guy that sells them their wheeel & tire & radio package on weekly payments! That stuff never makes it back to the yard when the repo guys pick the vehicle up!

I like the idea personally. If it is reducing the default rate that much these people must really have the cash. Either a reminder is helping them decide between the car and another 40 of old E, or the people going into the program are self selecting as responsible people who got themselves in a bad spot. Either way anything that reduces defaults is good in my book. Presumably they get some sort of rate discount for this thing.