No Dough, No Go! Technology Disables Car if You Miss a Payment!

Concerned about defaults on car loans to sub-prime borrowers (people with bad credit histories), lenders now can insist that a clever computerized box be installed in your car to alert you when your payment is due. When the lights start flashing, you know your payment is coming due. On the day the payment is due, the box also beeps incessantly.

When you make your payment you receive a six digit code to punch into the box. Without the code, your car is disabled and with new options such as tying the devices into GPS systems, it is easy for the repo man to locate the vehicle and repossess it!



Companies such as Sekurus (who makes a device called On Time) sell the devices to financing companies at up to $250 per box. Why would the finance companies invest so heavily in the devices? Because defaults on high-risk loans are cut from 30% to 5% when devices such as On Time are installed in the vehicle and the devices can drastically cut the time and expense of repossession.

Discussion Questions for Students:
1) How would you feel about having a device such as On Time installed in your car? What if it was the only way you could obtain a car loan for a vehicle you needed to commute to work?
2) Do you think it is ethical for a company to disable a car when a customer misses a payment? Should there be extenuating circumstances that would prevent the car from being disabled or repossessed?
3) If a GPS tracking device was installed in your vehicle, what potential ethical issues could arise from people (your parents, the police, your employer, the loan company) examining the data gathered by the GPS? Does this change how you feel about having a GPS device installed in your car?