Posted on 09/24/2014 7:15:32 PM PDT by blam
Michael Corkery and Jessica Silver-Greenberg
September 24, 2014
The thermometer showed a 103.5-degree fever, and her 10-year-old’s asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start.
The cause was not a mechanical problem — it was her lender.
Ms. Bolender was three days behind on her monthly car payment. Her lender, C.A.G. Acceptance of Mesa, Ariz., remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March.
“I felt absolutely helpless,” said Ms. Bolender, a single mother who stopped working to care for her daughter. It was not the only time this happened: Her car was shut down that March, once in April and again in June.
This new technology is bringing auto loans — and Wall Street’s version of Big Brother — into the lives of people with credit scores battered by the financial downturn.
Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years. The jump has been driven in large part by the demand among investors for securities backed by the loans, which offer high returns at a time of low interest rates. Roughly 25 percent of all new auto loans made last year were subprime, and the volume of subprime auto loans reached more than $145 billion in the first three months of this year.
But before they can drive off the lot, many subprime borrowers like Ms. Bolender must have their car outfitted with a so-called starter interrupt device
(snip)
(Excerpt) Read more at dealbook.nytimes.com ...
I like this a lot. I am so sick of folks not paying their bills. They want everything free.....even water in Detroit. Can these folks pay anything??????
This is great news. If you buy a $30,000 car and you can’t pay for it— you are stupid and it stops. I hope you get stuck on a freeway and walk home. Make all payments 15 days in advance. The people of this country are so stupid they actually buy 30 and 50 thousand dollar cars they can’t afford because they “look cool”. Good luck now!! Great technology.
You don’t have a $350 a month payment on a nine year old cold.
I suspect there is a long history of very bad decisions.
If this woman’s payment were 1 month late, I might agree with you. But a $389 payment on a 9 year old minivan tells me that this woman was at least 2 months late, probably 3.
Good for you!
It was a nine year old minivan - Kelley Blue Book puts its value at less than 5k! There’s no way this woman was only 3 days late on a payment. More likely 3 months and 3 days.
I am sorry. I rarely disagree with you. But I absolutely love this program and actually hope is is extended with other areas. Perhaps if you don’t pay your mortgage, you cannot get into your home. This has so many opportunities for America. I just can’t wait to see them evolve.
Because she couldn’t remember the number.
oh come on, that's just crazy talk /sarc
The one thing is that there are predatory used car places that overcharge for crappy cars with 25%+ loans for people with terrible credit histories.
For example, an $8500 loan at 25% with no down payment over 3 years would be $359 per month.
Did this come from legislature or the lenders? Gov’t shouldn’t have anything to do with this. If it’s the lenders, only 3 days seems a bit much, I thought the norm was 10 days.
There must be other finance options that do not use this method but still,
a Credit score below 650 isn't a bad credit rating, below 500 yes.
Ignoring the repo guy calling you more than once isn't a good idea either.
Depends on her term, subprime lenders usually cap the term at 24-48mos & the rates 22.99 or higher. Also, the used car dealers will bump up the sales price because they know customers are desperate for a car.
Short term, inflated sales price & high rate = crazy high payments.
“It was not the only time this happened: Her car was shut down that March, once in April and again in June.”
While I hate big brother tracking capabilities, this woman knowingly entered into a contract where this consequence would have been stated in the terms (hopefully).
It’s the situations when we are secretly and unknowingly tracked and spied upon that get under my skin.
Did the bleeding hearts who wrote this ever stop to consider that if it wasn’t for this method of protecting the investors who loaned her the money that she may not have ever been able to purchase a vehicle in the first place?
Decent guy, hard worker but got clobbered with medical bills. It is insane. I'm making less than a $300 monthly payment on a 2013 model because I was able to make a substantial down payment and have so-so credit. Good for me, but not everyone can do that.
It is possible she is being clobbered like my friend with a hugely unrealistic interest rate. FWIW, he was able to refi and got that rate down to 8% or so by paying down his bills. Still not nice, but much better.
“an’ dey cannot fly either!”
LOL
CC
The place is probably a “note lot”, you know, “we tote the note”. How they operate is they buy crap cars at auctions. Lets say they paid $1,500.00 for a 9 year old van. They sell it for 3 grand with 1500 down and they carry the note at 10 or 15%, usually with weekly payments. You miss by a day or three and the repo man picks it up, and they re-sell the car again after 30 days. First buyer loses all.
I worked for a repo guy for about three months until I could not stand it any more. The industry is so full of crooks that take huge advantage of folks that are having tough times just getting by. Look for increased advertising around tax time, note lots have their biggest months at tax time grabbing that unearned income tax return checks.
Usually those checks are spend for cars, clothes, jewelry, booze, drugs and most other crap that are not needed. You know, like pedicures.
9 year old minivan is hardly a $30,000 car.
more likely $3,000.
The news story chose a good ‘victim’ here, cuz with a $350 a month payment it seems as though someone is ripping her off.
I hate to break the news on privacy, but the that horse has already left the barn.
High quality License Plate Cameras are now recording the movements of virtually EVERY CAR in some areas of the country and will quickly cover the entire country. Virtually no privacy protection on that data either...your boss can pay the camera operator a fee and PROVE that you arrived late to work.
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