High-tech 'repo man' keeps car payments coming
http://www.usatoday.com/tech/news/techinnovations/2005-11-29-tech-repo-man_x.htm

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.

Patriot is the kind of operation that specializes in steeper interest, high-risk car loans. It advertises "no turndowns" — a corner of the used car business that deals with a "credit-challenged" clientele, as the industry puts it.

"Bad credit?" said Art Madden, Patriots general manager. "I'd be happy if they just had bad credit."

Not surprisingly, default rates are high. It's not unusual for more than a third of the cars sold off such lots to wind up being repossessed. Since Patriot began using PayTeck three years ago, its repos have dropped from about 45% to less than 15%. Madden figures he has close to 500 of the $200 units on the road — an investment that has not only cut repos but boosted business.

"Without it, we could never make a lot of the sales we do," Madden said, "not if we wanted to keep our doors open."

Buyers sign forms acknowledging the Smart Box, agreeing not to tamper with it and promising to return to the dealership for a free removal after the last payment is made.

"It's amazing how people manage to pay when they know their car won't start," Madden said.

Some consumer watchdogs don't approve, though no complaints have been filed on Virginia's consumer hotline.

"I think it's the level of control that bothers me," said Ken McEldowney, executive director of Consumer Action, a national non-profit group based in San Francisco. "It just sounds like Big Brother run amok. There's got to be a more respectful, less intrusive way of doing this that isn't so demeaning."

The systems will not cut off a running motor, but McEldowney still worries about safety.

"What if a young mother with children gets stranded in a dangerous part of town?" he asked. "Or someone needs to go to the hospital?"

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The idea sounds brilliant to me. No telling how many desperate families were previously barred from car ownership because they were considered "too risky."
Not to mention that the device reduces the cost of car ownership for low-income drivers, by lowering the overhead costs the dealers have to pay to cover reposessions, delinquencies, and fraud.

12/5/2005 2:06:58 PM

I doubt there were any families that this allowed them to own a car, where they otherwise couldn't have.

But, I don't see anything wrong with this. The device doesn't track their movements, and they agree to have them.

12/5/2005 2:16:25 PM

why would you be driving in a bad part of town if you knew it was time to pay and you didnt yet? hospital is a better concern.

12/5/2005 2:27:55 PM

this is very old news - posted a long time ago - search

12/5/2005 2:32:12 PM

Quote :

"There's got to be a more respectful, less intrusive way of doing this that isn't so demeaning.""

Like having the repo man break into your garage and steal your shit back while the whole neighborhood watches. That's not demeaning at all.

I think this is a great idea.

12/5/2005 2:49:34 PM

I agree with the technology. Until you make that last payment, the car is not completely yours and the creditor has to insure that you will pay somehow.

12/5/2005 2:59:55 PM

Quote :

"Buyers sign forms acknowledging the Smart Box, agreeing not to tamper with it and promising to return to the dealership for a free removal after the last payment is made."

This is why I like to steal my cars. Fuck debt.

12/5/2005 5:48:15 PM

Quote :

""What if a young mother with children gets stranded in a dangerous part of town?""

this made me lol

because if youre getting this type of loan then there is a pretty good chance that you live in the dangerous part of town

12/5/2005 8:20:44 PM

if your other option is to ride the bus, why not?

12/5/2005 8:45:24 PM

6 months ago i drove up to that same dealership to buy a 2002 wolksvagen golf tdi...they had already sold it, though

oh, and as for the technology, i think it's awesome

12/6/2005 10:40:24 AM