Deadbeats Rejoice: Pay As You Go Cars
May 7th, 2008 | by Mike G |
You can rent furniture weekly or pre-pay cell phone service, where if you do not pre-pay for next month, your service is interrupted. Now you can have that same arrangement with your car.
Automotive lenders are installing a device into the cars of high risk borrowers that will encourage them to pay on time. These cars have a box installed such as the "On Time" unit by Sekurus. When your monthly payment draws near, lights on the device begin to flash. On the due date, it will start to emit a reminder tone. If the payment isn’t made, then at some point the device will prevent you from starting the engine. Once a payment is made, the consumer receives a code that they then type into the unit. The code resets the system for another month and unlocks the ignition. Use of the device seems successful, at least for lenders, who claim that default rates are reduced in high risk car loans by 30%.
