High-Tech RepoMan

PlayfullyClever writes "A new gizmo is upping the odds that even the most hard-knock customer will come up with the car payment. Hooked into the ignition system, the gadget comes in a handful of versions with one common conclusion: No pay, no start. It's worked wonders at Norfolk's Patriot Auto Sales, where nearly every car that drives off the lot is outfitted with a PayTeck Smart Box, a system that hands over a five-digit code in exchange for each payment. Come due date, the car won't crank until the customer punches the code into a palm-size keypad wired into the dash. I would think this "Smart Box" would get hacked way too easily, leaving car companies without their money."

Comments

Repossession is not a joke

[ReformedExCon]

Repo men, whatever you think about their profession, risk their lives daily in order to prevent auto theft, which in a way is what failing to pay car payments is.

It isn't even like loan companies send out the repo man after your first failure to pay. You typically get several months of haggling and pleading before the loan company has no other alternative but to send someone out to repossess the automobile. And the repo man is frequently in danger from people who don't have enough money to pay the loan companies but usually enough to buy bullets.

Using a technical measure to disable cars, making them useless to the owner, is a great idea. It works with drunk drivers and car thieves. Just kill the engine and the car isn't going anywhere. The loan company can then repossess the car at their leisure, along with adding extra pressure on the defaulting "owner" to pay.

The real bottom line is not to over-extend your finances. Try to buy large items like cars with cash. The worst monetary investment you can make is to take out a loan to pay for a car you can't afford.

Re:What the hell

[Shakrai]

Well, at least people with bad credit histories will be given the chance of buying to buy a car. It won't matter for those who have the money, but it just might be good for those who are poor.

Actually, it's still extortion plain and simple. There is a local "buy here, pay here" car dealer that has been using these devices for quite awhile. You would think that in exchange for getting put a device on a car that you own that they would give the people with shitty credit history a break on the interest payments. After all, isn't the theory behind charging people with lousy credit higher interest that you need to do so in order to recoup losses? Not as much room for losses with this system.

Of course it doesn't work out that way in practice. They still charge anywhere from 15%-25% on a car loan. It's legalized loan sharking that takes advantage of the most desperate among us.

I'd also point out that even if you need a loan to buy a car you still own that car outright. The only thing that the bank/financing company has in the car is a security interest. This is not the same as them owning a percentage of the car. So why the hell should they be allowed to require this?

I would encourage everybody out there to avoid the whole problem by not buying a car that you need a loan on. I have never spent more then $2,000 on a car. Sure, I spend some money in repairs -- but the year end figure doesn't come close to most car loans (which still need repairs). And driving cheap ghetto cars allows me to avoid having to pay for expensive collision coverage.

Failing that, if you must have a nice car and can't afford to buy it outright, then get the loan for your car from your credit union or local community bank. Why the hell should we be doing the auto financing companies any favors?

These aren't for everyone

[CuriousGeorge113]

Before we get too far into the comments going on and on about how we wouldn't accept these in our cars and yadda yadda, we have to stop and remember one thing.

For the majority of people, you wouldn't need a system like this. Why? Because the majority of people, especially here, have reputable credit and can get a car loan, or have cash on hand to put a significant amount down.

I have a good friend who works in auto sales, and things in the used car business have become so bad, in terms of financing, that they were getting customers on the lot, essentially 'sold' them the car, and then couldn't get any banks to finance them. So what were they left doing? Financing the sale themselves.

Basically, you agree to pay the car dealership directly, instead of a bank. This puts a lot of pressure on the dealership, because instead of getting, say $12,000 upfront, in one payment from a bank, they are now getting monthly payments of $250 for the next 5 years or so. In doing this, they are really hanging their rear out, because if that customer makes two payments, and disapears off the face of the earth, that dealership has no way of tracking them, or their car, down.

That's why these systems are catching on so quickly, not as another form of 'big brother', but as an alternative for someone out there who needs a car, and can make payments, but can't get financed through a bank. This way, a dealership can move cars off their lot, and still protect their investment.

If you don't want a system like this in your car, the solution is simple, keep good credit. If you do that, then you'll be able to get bank financing, not get ripped off by a car dealership, and don't have to worry about 'big brother' in the passanger seat.