Posted on 05/24/2003 4:26:04 AM PDT by Dane
Miss a payment and your car may die
Imagine getting in your car and it won't start. The situation would be aggravating for most, but for hundreds of thousands of Americans it could simply mean their car payment is overdue. A growing number of car dealers are using starter stoppers technology to ensure you don't get lax on your loan.
Macy Pearson loves the used car she just bought, but it will only start if she's made her car payment. Nestled under her dash is a device called a starter interrupt system. If Macy doesn't pay, the device is set to disable her car so she can't drive.
Macy's salesman insisted she have it, since she has no credit history. Once Macy sends in her payment, she's given a code number to input into a remote that connects to a device underneath the dash. "I stick it right in here. You punch in your code, you hear another little chirp and you're done," explains Macy, as she easily connects the device that will allow her car to run for another week.
Mike Simon's company, Payment Protection Systems, made the device in Macy's car and some 60,000 others bought at corner used car lots and dealerships alike. He says the device protects dealers from credit risks. "The people know that they have to make their payment and they really do perform in making their payments on time," says Simon. "Our delinquency rate was probably up around ten to twenty percent without the device. And since then, it's dropped down below two percent," says car dealer Steve Matthews about using the device with costumers.
It may be good for dealers, but what about drivers. Not everyone's sold on the idea of no cash no dash. Jack Gillis of the Consumer Federation of America has written a book about buying a car. He says the devices could put customers at risk. "You might be in a situation where you are in an unsafe position, and you need to get out of there quickly, and you can't do it," says Gillis about the pitfalls of such a device.
But device makers say cars won't stop while in motion they just won't start once they're turned off. Even then, drivers like Macy can call their salesmen for an emergency code that is good for 24 hours. Dealers also insist everyone is told about the service before they buy, and device makers like Stan Schwarz says drivers are warned before the "kill."
Manufacturers say the technology can make the difference between getting a car and walking on foot for many. But critics say customers don’t always leave the car lot with a better price, or better financing if they have the device. It turns out cars may not be the only things fitted with those kill chips. Look for them to turn up in computers, air conditioners, and yes, even TV's.
Macy's no critic, she's grateful for the opportunity to buy a car and working hard to get a solid credit history started. To her, that device under her dash is a dose of discipline. "It really helps because it makes you pay on time."
No it isn't. This is not the customer with good credit or even shaky credit. This is for downright deadbeats. For them the only choice is "the payment book or the bus schedule." No one forces them to buy. No one should force dealers or banks to take the risk involved in dealing with this type of clientele.
There is always the risk that the customer and the car will disappear altogether or will be trashed when it is found. Even with a new car and a good customer, there is that risk. That's why a 5 year car loan bears a higher interest rate than a 30 year home mortgage. (Where 0% or special low rate financing is offered, the vehicle manufacturer pays the financing branch the equivalent of the real rate - and not everyone qualifies for those special rates.)
I swear we went through this for at least four months, each call from the Ford Credit taking 40-45 minutes to work our way through progressive supervisors, always with the same admission that the problem was not ours, always with the promise we wouldn't be called again.
Finally, they did manage to straighten things out and sent us an apology letter. If the car had refused to start for every phone call, however, I would have been even more royally pi**ed than I already was at the waste of time with each phone call.
This could work for doctors and hospitals too. Disable pacemakers when the patient falls behind in his payments.
Don't get ludicrous, there is a big difference between a pacemaker and a car and most rational people can see that.
I will ask you also, should the government come in and stop this practice by some car dealerships.
Doubtful, if the market is as competitive as you say. Sooner or later, someone will figure out that they can drop rates at least somewhat and still maintain the same profit margin by virtue of the fact that they're saving by reducing the expenses incurred by repossessing, reconditioning, and reselling cars - even if it's a constant supply of people with horrible credit walking in your door, this chip is supposed to drastically reduce the likelihood of default. And once one dealer realizes this, their competitors will have little choice but to follow suit. Assuming the market is as competitive as you say, and ths chip actually works as advertised, of course... ;)
And it will be only a matter of minor modifications to be able to stop you car while it is idling at a red light and the bad guys will have you at their mercy.
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