Auto Finance in the Know

For those who can’t pay their car payments, there may be new risks to get you to pay up. More often used car dealers are utilizing immobilizing devices that are capable of disabling a car if the buyer fails to make loan payment. These devices are often located underneath a car’s dashboard or embedded in the ignition.

Typically, these disabling devices have been used mainly by used car dealerships, such as among used cars Kansas City dealers. But as more buyers are faced with economic hardship, more dealerships are finding that the devices are almost necessary.

While used car sales have actually been helped by the economic downturn, the economy has also led to less available credit. As such, the car dealers and finance companies that are able to sell their vehicles increasingly need more at their disposal to encourage customers to make their payments.

In addition to helping lending companies and dealers, disablers are arguably beneficial to customers, as these devices may help them change their ways and force them to adhere to the responsibilities of owning a vehicle. In fact, few consumers would dare miss a cell phone payment as the phone company will immediately terminate the service. With the principle applied to the car business, dealers like Toyota San Diego and lenders are both hoping it will spur more regular payments.

With used car sales averaging around 40 million per year, and with many of those customers having little or no credit, Gardena Honda dealers believe that the disabling devices appear to be on track to become a necessary component in the car sales business. Even for those that would typically be considered high risk seem to be making payments on time thanks to the disabler devices. And, Westminster Used Cars says with the prevalence of satellite navigation systems, it may become even easier for repo teams to locate and the disabled vehicles.

Many consumers compare these devices to ankle bracelets worn by criminals under house arrest. However, Chicago Car Loans say the device is  a reasonable response to those that neglect to make payments or simply cannot afford the car that they drive. And with the reminder chimes that the devices feature, Used Cars Garden Grove says it helps keep drivers on top of their payments and ultimately contributes to improved credit.

Regardless how consumers and consumer advocacy groups see these devices, Denver Car Loans expects car dealers and lenders continue to adopt the technology. Despite any outcry, they are fueling more on-time car payments, and for dealers in this economy, that alone can make all the difference. (more…)