Poor Credit Car Buyer: Starter-interrupt Device for Dealers

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Ralph
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Poor Credit Car Buyer: Starter-interrupt Device for Dealers

Post by Ralph » Tue Jun 13, 2006 10:47 pm

Late on payments? System won't let car engine start

By DEBORAH YAO
THE ASSOCIATED PRESS
(Original Publication: June 13, 2006)


What's the deal with starter-interrupt devices?

The device: Starter-interrupt devices emit a brief series of sounds or flashes of light days before the payment deadline. A driver who still misses a payment either won't get a code with which to start the vehicle, or the dealer or lender can remotely disable the car.

The customers: Drivers with bad credit, such as personal bankruptcy, or who have had a repossession.

Number on the road: About 1 million starter-interrupt devices are currently in use.

LIMERICK, Pa. — Rashida Redd punched in a six-digit code in her Pontiac Grand Prix and got a new lease on life.

The 34-year-old Pottstown mother of five had to file for personal bankruptcy about a year ago in the face of mounting medical bills from her husband's open heart surgery. Despite her poor credit history, Redd was able to lease the three-year-old car from Williams Pre-Owned of Limerick on the condition that it have a starter-interrupt device.

"At least I was able to save the house," said Redd.

The device, the size of a cigarette pack and mounted under the dashboard, flashes green if she has made a car payment on time. If she misses her $94 weekly payment, it won't let her car start.

Starter-interrupt devices are becoming a popular way for lenders to ensure they get paid, and consumers seem willing to accept them to get into nicer cars, use a smaller down payment and qualify for a lower interest rate, according to device manufacturers.

Ken Shilson, managing partner at Shilson Goldberg Cheung & Associates in Houston, an accounting firm that works with auto dealers who make use of the device, said the market for them is growing.

The major manufacturers of the device report double-digit increases in sales so far this year, compared with the same period a year ago. An estimated 1 million are in use today, he said.

Consumers with poor credit often are faced with interest rates of over 20 percent — nearly triple the rate drivers with good credit can get, Shilson said. They also have to pay a down payment equal to 10 percent to 20 percent of the car's purchase price, while buyers with good credit can purchase a vehicle with little or no money down.

Redd's car is equipped with a device made by Payment Protection Systems Inc., of Temecula, Calif. It's one of three manufacturers that dominate the market — the others are PassTime in Littleton, Colo., and Pay Technologies of Cleveland, Ohio.

The companies make a variation of the same device: The units are connected to the starter and emit a brief series of sounds or flashes of light, days before the payment deadline. If the customer then makes a timely payment, he or she can contact the dealer for a new code that will allow them to operate the vehicle. Some devices are remotely controlled by dealers.

Devices typically are mounted under the dash or hidden in places such as a glove box.

Manufacturers say the device won't kill the engine while the car is being used; it will only stop the vehicle from starting. Also, consumers late on payments are allowed emergency starts, the companies say.

Shilson said the devices are mainly geared for the "buy here, pay here" market — consumers with the lowest credit scores. Typically, these buyers have filed for bankruptcy or had a repossession.

"Buy here, pay here" customers also are limited to how expensive a car they can buy, typically $5,000.

Jack Gillis, a spokesman for the Consumer Federation of America and author of "The Car Book," doesn't like the idea of having a third party have control over a driver's vehicle.

"It's a rather draconian measure to take," he said. "What these companies are able to do is sell cars at virtually no risk to themselves, with all the risk to consumers."

But Auto Trakk LLC, of Montoursville, Pa., Redd's lender, said the device lets the company consider serving even the riskiest customers.

"It enables us to look at lower credit scores," said Denny Sullivan, marketing manager.
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Post by BWV 1080 » Tue Jun 13, 2006 11:14 pm

Maybe the hospital could install a similar device on her husband's heart to make sure they stay current on those payments

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Post by Corlyss_D » Tue Jun 13, 2006 11:43 pm

Interesting idea. I had heard of it for DUIs but not for bad credit.
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Ralph
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Post by Ralph » Wed Jun 14, 2006 9:54 am

Several high end stereo manufacturers now offer amplifiers and CD decks that automatically shut off when encountering twelve-tone works.
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Post by jbuck919 » Wed Jun 14, 2006 10:46 am

Ralph wrote:Several high end stereo manufacturers now offer amplifiers and CD decks that automatically shut off when encountering twelve-tone works.
And send a report to the FBI.

There's nothing remarkable about it. All one has to do is hit the right keys at the right time and the instrument plays itself.
-- Johann Sebastian Bach

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Post by Corlyss_D » Wed Jun 14, 2006 12:45 pm

Ralph wrote:Several high end stereo manufacturers now offer amplifiers and CD decks that automatically shut off when encountering twelve-tone works.
:lol:

And replace it with Dittersdorf?
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Post by BWV 1080 » Wed Jun 14, 2006 1:29 pm

Corlyss_D wrote:
Ralph wrote:Several high end stereo manufacturers now offer amplifiers and CD decks that automatically shut off when encountering twelve-tone works.
:lol:

And replace it with Dittersdorf?
That is only if you are late on a payment. Preferred customers get the full dodecaphonic sound system complete with Milton Babbitt's complete works hardwired in the system. Not only that, but the car horn blows the row to Webern's op 27

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Post by Corlyss_D » Wed Jun 14, 2006 1:35 pm

BWV 1080 wrote:
Corlyss_D wrote:
Ralph wrote:Several high end stereo manufacturers now offer amplifiers and CD decks that automatically shut off when encountering twelve-tone works.
:lol:

And replace it with Dittersdorf?
That is only if you are late on a payment. Preferred customers get the full dodecaphonic sound system complete with Milton Babbitt's complete works hardwired in the system. Not only that, but the car horn blows the row to Webern's op 27
:lol: :lol: :lol: :lol: :lol: :lol: The horn is a nice touch. :D
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