Used cars in texas beware...

[hobbes4star 0]

A car dealer in Texas has come up with a new way to sell automobiles to customers with bad credit. Install a remote control kill switch.
The kill switch is inside a black box affixed to the dash-
board. Little lights in the black box start flashing on the
first day a car payment is late. On the fourth day, after
two more days of warning lights, the car won't start.

"I would not undertake buy-here/pay-here without this
system," said Ray Williamson, president of North Texas
Motorcars, which sells about 50 vehicles a month and in-stalls boxes in each of them. "There's just too much risk." The box - called a starter interrupt unit - is used mostly at used-car dealerships that provide financing to customers with bad credit. But other segments of the auto industry may adopt it, particularly if consumers' credit ratings continue to decline. This could be just the beginning. Once a precedent has been set dealers will start installing remote control kill switches in all vehicles regardless of a person's credit. Is it fair? Would you buy a car with a starter interrupt unit?

if fun were easy it wouldn't be worth having, right?

[BillyVance 35]

Not that I'm ever late on my payments, but that would suck if all cars were that way. I support doing that for high-risk loans and bad-credit customers though.

"Mediocre people don't like high achievers, and high achievers don't like mediocre people." - SIX TIME National Champion coach Nick Saban

[kallend 2,150]

I doubt it would bother anyone who knows much about cars. Unfortunately very few people these days know much about cars (and I hate to say, that includes my own kids).

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The only sure way to survive a canopy collision is not to have one.

[Dionysus 0]

This has been around for a couple years or so. The first instance I am aware of was in NY, if I remember correctly. It became a rather significant legal battle and eventually the dealer won.
As for this happening on prime credit applicants I, personally, don't see it. I say this simply because prime applicants have much more freedom with who they finance the car with. The subprime customers end up in the situation where they have to accept the "box" because it is their only option if they want to finance.

[mr2mk1g 10]

yup.

Plus cost benefit. It's worth the cost of buying and installing a box for cars sold to high risk debtors - you end up losing on every box you put in but the savings delivered by those you activate negate that loss.

On the other hand it's not worth the cost to buy and install the box on low risk debtors - you wouldn't get to use enough of the boxes to justify the expense of putting them in.

Capitalism.

[justinb138 0]

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I doubt it would bother anyone who knows much about cars. Unfortunately very few people these days know much about cars (and I hate to say, that includes my own kids).

That's what I was thinking, coudn't be too hard to remove. If they ever become commonplace, someone will probably make a lot of money taking them out.

[Gravitymaster 0]

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I doubt it would bother anyone who knows much about cars. Unfortunately very few people these days know much about cars (and I hate to say, that includes my own kids).

That's what I was thinking, coudn't be too hard to remove. If they ever become commonplace, someone will probably make a lot of money taking them out.

Except the contract would probably contain a clause that calls the entire loan due plus penalties if it's removed.


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[billvon 3,120]

>Except the contract would probably contain a clause that calls the
>entire loan due plus penalties if it's removed.

Well, given that's what they do if you default on the loan right now, and it doesn't work - I don't think that's much of a solution.

[Gravitymaster 0]

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>Except the contract would probably contain a clause that calls the
>entire loan due plus penalties if it's removed.

Well, given that's what they do if you default on the loan right now, and it doesn't work - I don't think that's much of a solution.

I didn't say if you default on the loan. I said if you remove the device.

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[billvon 3,120]

>I didn't say if you default on the loan. I said if you remove the device.

The issue is that if you default on the loan, they don't get the car back. If you remove the device, you don't get the car back. (Presumably someone who pays their bills and follows the rules has no reason to remove the device, no?)

[kallend 2,150]

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>Except the contract would probably contain a clause that calls the
>entire loan due plus penalties if it's removed.

Well, given that's what they do if you default on the loan right now, and it doesn't work - I don't think that's much of a solution.

I didn't say if you default on the loan. I said if you remove the device.

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If you're not in default why would you remove the device anyway?

...

The only sure way to survive a canopy collision is not to have one.

[Gravitymaster 0]

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>I didn't say if you default on the loan. I said if you remove the device.

The issue is that if you default on the loan, they don't get the car back. If you remove the device, you don't get the car back. (Presumably someone who pays their bills and follows the rules has no reason to remove the device, no?)

Your logic is flawed. It doesn't follow that if you default on the loan they don't get the car back. High risk car loans have been made for many years without the device and the lender in most cases got the car back. This is just an added layer of security that probably won't allow someone with very poor credit to purchase a vehicle he couldn't ordinarily get a loan for. Contrary to popular belief, most lenders will not make a loan to an individual they don't think will pay. It is a common misconception that a large initial deposit will guarantee a loan.


In the case of independent "buy here, pay here" dealerships, it will most likely only reduce the cost of recovery. My guess is the device will also have a GPS device so the lender can locate the cars location once the ignition is disabled.

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[Gravitymaster 0]

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>Except the contract would probably contain a clause that calls the
>entire loan due plus penalties if it's removed.

Well, given that's what they do if you default on the loan right now, and it doesn't work - I don't think that's much of a solution.

I didn't say if you default on the loan. I said if you remove the device.

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If you're not in default why would you remove the device anyway?

For the same reason many tenents change the locks on rental housing.

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[billvon 3,120]

>Your logic is flawed. It doesn't follow that if you default on the loan
>they don't get the car back.

OK. Then they don't need the black box.

>Contrary to popular belief, most lenders will not make a loan to an
>individual they don't think will pay.

Lenders will definitely lend money to people who may not be able to pay. It's not altruism on their part; it's good business. If they think 60% of the peple won't pay their bills, but they can charge 120% interest on the remaining people who _will_ pay, then they still win in the end. (Even better if they have debt collectors, or black boxes, that help them recover more of their loan.)

[kelpdiver 2]

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Contrary to popular belief, most lenders will not make a loan to an individual they don't think will pay.

Providian's past suggests otherwise. If you want to grow your numbers, you have to look towards the subprime market. The good credit market is highly competitive. But the subprime - you can abuse the ignorant to great profit, even with a high loss rate. Even better if you work the back angle with Congress on bankrupcy reform.

Given the past history of the industry, I can see someone wanted to disable the device even if they intend to stay current on their loan. Dealer financing, even at the manufacturer level, is pretty corrupt. GMAC used to jump all over their customers that ever lapsed on the insurance requirement, automatically signing them up for more coverage than the finance contract specified, for the remaining life of the loan (now extended several months or years to cover the insurance bill).

[Gravitymaster 0]

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>Your logic is flawed. It doesn't follow that if you default on the loan
>they don't get the car back.

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OK. Then they don't need the black box.

If you read my post, I said the box will reduce the cost of recovery. So yes, it does have value.


>Contrary to popular belief, most lenders will not make a loan to an
>individual they don't think will pay.

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Lenders will definitely lend money to people who may not be able to pay. It's not altruism on their part; it's good business. If they think 60% of the peple won't pay their bills, but they can charge 120% interest on the remaining people who _will_ pay, then they still win in the end. (Even better if they have debt collectors, or black boxes, that help them recover more of their loan.)

Doesn't work that way. There are laws against usury.

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[billvon 3,120]

>If you read my post, I said the box will reduce the cost of recovery.
>So yes, it does have value.

If the guy doesn't want to pay, and wants a car, then he takes out the box. Which leads us right back to the beginning of the discussion.

>Doesn't work that way. There are laws against usury.

Then there are a great many criminals making a very good profit in this game.

[Gravitymaster 0]

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Contrary to popular belief, most lenders will not make a loan to an individual they don't think will pay.

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Providian's past suggests otherwise. If you want to grow your numbers, you have to look towards the subprime market. The good credit market is highly competitive. But the subprime - you can abuse the ignorant to great profit, even with a high loss rate. Even better if you work the back angle with Congress on bankrupcy reform.

Thre's no doubt that lenders will take a certain risk to increase profits. They will not, however make a loan to someone they don't think will pay. Go by a local used car dealer and tell him you have had your last 4 cars repossessed and ask if he thinks you can get approved.

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Given the past history of the industry, I can see someone wanted to disable the device even if they intend to stay current on their loan. Dealer financing, even at the manufacturer level, is pretty corrupt. GMAC used to jump all over their customers that ever lapsed on the insurance requirement, automatically signing them up for more coverage than the finance contract specified, for the remaining life of the loan (now extended several months or years to cover the insurance bill).

I agree, although I wouldn't necessarily classify it as corruption. The lenders didn't create the circumstances that caused a person to default on prior credit. They are simply establishing a more aggressive buying environment that puts a greater sense of urgency on repayment of the loan.

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[Gravitymaster 0]

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>If you read my post, I said the box will reduce the cost of recovery.
>So yes, it does have value.

If the guy doesn't want to pay, and wants a car, then he takes out the box. Which leads us right back to the beginning of the discussion.

>Doesn't work that way. There are laws against usury.

Then there are a great many criminals making a very good profit in this game.

The difference is that if it's a simple matter of not repaying the loan and the car is repossessed, the buyer could cure the default by catching up his payments. In the case of removing the box, there would be no 2nd chance.

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[billvon 3,120]

>The difference is that if it's a simple matter of not repaying the loan
> and the car is repossessed, the buyer could cure the default by
> catching up his payments. In the case of removing the box, there
> would be no 2nd chance.

Ah, I see your point. So the penalty for removing the box would be stronger. Might work, although that would likely just fuel demand for the bypass kit that allows the box to remain attached and operating. Wouldn't even be that hard.

[justinb138 0]

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>The difference is that if it's a simple matter of not repaying the loan
> and the car is repossessed, the buyer could cure the default by
> catching up his payments. In the case of removing the box, there
> would be no 2nd chance.

Ah, I see your point. So the penalty for removing the box would be stronger. Might work, although that would likely just fuel demand for the bypass kit that allows the box to remain attached and operating. Wouldn't even be that hard.

Yep. How would they find out that the box was disabled anyway?

[billvon 3,120]

>How would they find out that the box was disabled anyway?

Well, they could try it. Which would mean that you need a hidden defeat button. You could make it annoying but not impossible, which might be enough to discourage _some_ people from doing it.

[justinb138 0]

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>How would they find out that the box was disabled anyway?

Well, they could try it. Which would mean that you need a hidden defeat button. You could make it annoying but not impossible, which might be enough to discourage _some_ people from doing it.

I understand that, but to verify that it works, wouldn't the driver then have to try to start the car, and then someone be there to verify that it didn't start?

Also, trying out every single one would hinder its cost-effectiveness.

[rehmwa 2]

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If you're not in default why would you remove the device anyway?

If you're not guilty why wouldn't you let them search your house?

You right wingers crack me up.

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Driving is a one dimensional activity - a monkey can do it - being proud of your driving abilities is like being proud of being able to put on pants

[gemini 0]

This thread brings up another used car warning...

There are thousands of cars and trucks in Alabama, Mississippi, Louisiana and Texas that were flooded and will be totalled by insurance companies. Wholesale auto buyers will purchase these cars and marginally clean them up and put them back on the market.

If your state does not require that totalled or flooded vehicles be so disclosed on the title, beware of any used vehicle purchase.

They will look great and appear to fun fine; at first...

Blue skies,

Jim