Automobile Dealers Use GPS Tracking for High-Risk Borrowers

GPS technology being used to track down vehicles after the car loan has defaulted.

Many dealerships cater to individuals who have a bad or no credit rating, but need a vehicle. This might be someone who needs a job, but can’t get one without reliable transportation. These buyers are known as “high-risk borrowers” because they need a car loan without having credit or collateral. Dealerships have their own reasons for giving loans to high-risk borrowers, but they do pose a higher risk.

In the past, a dealership risked losing a vehicle if the buyer suddenly defaulted on his loan and tried to keep the car anyway. Ideally, a customer would bring the vehicle back to the dealership if they were no longer able to pay car payments. In some cases, however, the buyer would run away with the vehicle and it could be close to impossible to find them again — without the help of a repo man.

Now, thanks to GPS Tracking Technology,  there is now a way to track down the car ― or even cause it to stop running (with adequate customer warning) in the event of a customer payment default.

The GPS technology in sold vehicles from high-risk dealerships would, in a sense, be somewhat of a trade. The customer would be aware of the GPS device installed in the vehicle and that if they don’t pay their loan according to the terms, the dealership can disable it remotely and track its whereabouts. The dealership informs the buyer of the tracker and they must sign a document saying they understand the installed device in their vehicle. The agreement would also state that the GPS device is deactivated once the loan is paid off in full.

This smart technology serves to benefit both car dealerships and car-buying customers:

Auto Dealership Benefits:

• Sell more vehicles
• Reduce late or defaulted payments
• Improve cash flow
• Recover vehicles of non-paying customers

Customer Benefits:

• Obtain a vehicle with no collateral, no job, no large down payment, or poor or no credit
• Track vehicle should it be stolen.

Lenders Requiring GPS Trackers in Vehicles of High-Risk Borrowers

Some lenders are now requiring the installation of GPS tracking devices in vehicles of dealerships who choose to sell cars to high-risk borrowers.

“Our lenders force us to do this to maintain lines of credit,” said Alice Baker, owner of a high-risk dealership called Little Motors. “To be able to keep track of our collateral, because the collateral that we keep track of is part of what we provide them for the backing of what we do.”

Another benefit to customers is that the GPS device can be used to track down stolen vehicles, as Alice Baker told reporters:

“Four of our customers actually had their cars stolen,” Baker said. “And all four of them, within less than an hour, were located and found and given back to the customers. So they work for more than one way or another.”

GPS tracking devices are being required of high-risk vehicle borrowers by more and more financiers throughout the US.

Source: News10.com

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