Did your car start this morning?

Posted: April 7, 2008 in Uncategorized

High-tech gear disables car if borrower misses payment

By Chris Woodyard, USA TODAY

MURRIETA, Calif. – When the light starts to flash, you had better have the cash.

That’s the reality for millions of subprime borrowers whose used car purchase is contingent upon having an unusual option: a little box mounted underneath the dashboard that forces them to make their payments on time.

A light on the plastic box flashes when a payment is due. If the payment isn’t made and the resulting code punched in to reset the box, the vehicle won’t start. The next step is a visit from the repo man.

As tighter credit crunches consumers, it seems business can only get better for Sekurus, a company based in this suburb east of Los Angeles. It’s among several companies that market such devices.


A forerunner company to Sekurus was founded in 1995 to sell anti-theft devices for cars based on radio-frequency identification, or RFID, technology. But within a couple of years, lenders had another idea: Could engineers come up with a device to force car buyers to pay up on time?

Sekurus was founded in 1999 and started selling On Time, as the device is called. It has sold 250,000 at up to $250 each. Most are bought by finance companies or dealers who cater to the most troubled car buyers, those who need basic transportation yet have checkered credit histories.

The box’s LED light starts blinking when a payment is nearly due. On deadline day, the unit not only blinks, but beeps. Motorists find it so annoying that it drives “them absolutely nuts,” Simon says.

When the customer makes the payment, the lender gives them a six-digit code to enter into the box.

The device lowers default rates for subprime auto loan borrowers that typically run about 30% to about 5%, according to Simon. When default rates fall, lenders feel more secure offering financing for more valuable cars to high-risk customers. By forcing buyers to pay on time, the device also rebuilds their credit record. (more…)


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