Miss A Car Payment, Have Your Car Shut Down?

Friday, Apr 17,2009, 10:10:54 PM Click:

Copyright 2009 Sun-Sentinel CompanyAll Rights Reserved Sun-Sentinel (Fort Lauderdale, Florida)

April 15, 2009 Wednesday Online Edition

SECTION: BUSINESS; Pg. Web

LENGTH: 310 words

HEADLINE: MISS A CAR PAYMENT, HAVE YOUR CAR SHUT DOWN?

BYLINE: Posted by Daniel Vasquez on April 15, 2009 12:44 PM

Bad times for consumers, but business is good for a growing market of makers of automobile shut-off devices - which turn engines off when car payments are late.

While the devices seem to be currently limited for use in the subprime auto loan market, the Associated Press reports other major lenders are looking closely at the technology.

The digital dig: Consumers struggling to pay bills typically have to prioritize what they pay first. These devices may force them to place their car payments high on that list.

And as credit ratings for consumers in financial trouble (those with pay cuts and job losses) continue to drop, more could end up shopping at subprime dealerships (those that cater to credit-damaged buyers). And the cars they buy could very well come with shut-off devices along with that new car smell.

The situation spreads, of course, if major auto dealerships start hooking these devices up for those with good or great credit.

About the devices: They are controlled remotely by a dealer or lender and are connected to a vehicle's powertrain. They can cut power several days after a payment is due. Drivers generally receive a musical tone or flashing indicator to let them know they are heading for a planned power-outage. And since these devices also include GPS-technology, they can help the Repo Man get his job done faster.

Why worry: One thing the subprime real estate market fiasco of late taught us was that many people with good credit were duped or tricked into subprime loans by bad acting agents and lenders. That could happen here too. And not only could those duped into subprime auto loans pay higher costs and fees, they could have their car shut-off because of a late payment. Just one more thing to worry about.

What do you say? Are these devices good or bad for consumers? Can you see ways in which they may help or harm consumers?

LOAD-DATE: April 16, 2009