Smart Cut-Off Devices Are Ensuring Monthly Payments Are On Track, Or Else Your Car Won’t Be

The technology that goes into today’s cars to make you comfortable is mind-boggling. There are smart-windows, smart wind-shields, smart wipers, smart weather-control, smart seat-belts, etc. But one such smart device is highly unwelcome and dealers are colluding with banks to ensure the monthly payments are kept on track.

Technically referred to as “Automated Collection Technology,” these are smart cut-off devices that are capable of immobilizing the vehicle in case the owner is late on monthly installments. These devices can be remotely activated and deactivated as per the whims of banks. Back in the good old days, defaulters had to be wary of repo men, who came by to collect the car. But these devices can be remotely triggered, sometimes automatically, causing a lot of annoyance and embarrassment to the owners who have fallen a little behind their payments for the vehicle, reported St. Louis Today.

Interestingly, these smart devices aren’t being fitted in brand new cars, but those that are re-sold as “pre-owned” or “used.” The technology is becoming a common part of the “deep subprime” auto lending market. That’s the market that finances old used cars for people with little income and poor credit. The industry charges high interest — often more than 20 percent. Unsurprisingly, such lenders have a huge problem of defaulters.

Legal services that work with low-income people have been fighting such measures for quite some time. They argue that these smart cut-off devices are actually dangerous; stranding motorists far from home, sometimes at night and in crime-ridden neighborhoods, said Rob Swearingen, the legal services attorney who recently filed a lawsuit against the practice.

“I call it stranding technology.”

Interestingly, the devices don’t stop a car while moving. But once the engine is off, they stop it from restarting.

The Lending Industry Justifies These Devices Saying It Vastly Improves Debt Collection

But the lending industry justifies these smart cut-off devices, saying they allow consumers to rebuild their battered credit scores, by forcing them to pay their dues on time. In turn, by reducing losses for lenders, it allows them to make bigger loans to borrowers so they can buy better cars. They also contend that these devices can also potentially foil car thieves by guiding police to the stolen car.

Apart from nagging the car owners with a persistent beep, they literally start to holler, when they are a day away from crippling your car. Additionally, do not think of tinkering with these smart cut-off devices. Most of them are hard-wired into the car with an additional GPS system to boot.

[Image Credit | Gas2, Passtime]