Making it Easier to Borrow Money

What do you do when you need a car, but have bad credit? Perhaps this isn’t a question you’ve ever considered, but for many Americans, it is a real concern. What would you put up for collateral? What kind of interest rate can you afford? What happens if you can’t repay the loan? Will it be repossessed if you can’t pay and you will lose all the money you had put into it? Some car dealerships in Phoenix, Arizona, and other locations around the US are approaching this problem in a novel way: placing a GPS tracking unit onto a car that is financed to ensure that their investment (i.e., the car) does not run away or vanish the moment you miss a payment.

How it Works

Some car companies are placing special GPS tracking devices on their cars that will have the ability to track the location of the vehicle and, in some cases, allow the car dealership to prevent use of the car. This would be done by disabling the car from starting up–of course, dealers have expressed that the devices are not able to turn off a moving vehicle. Once the payment has been received or the account settled, the car would then be allowed to function normally. If the car buyer decides to take off with the car and skip out on payments, the GPS tracking unit would help the dealership find the car before it got too far.

 

Not Your Mommy’s GPS: Other ways GPS is used in vehicles

Keeping track of vehicles that were bought with borrowed money

Allowing parents to keep tabs on the driving habits and patterns of their teen drivers

Used by police to track suspects of crimes

Used by police instead of high speed car chases

Benefits of Use

One of the main benefits to this program is that it will allow banks and dealerships to lend money with confidence that they will not lose the item in the event of non-payment. With that kind of security in place, there are fewer barriers and risks involved in lending money, even to people with bad or no credit. The dealerships and banks would not lose the car, nor would they have to use expensive repo services to re-obtain the vehicle in the event of non-payment. This could also be a benefit to the car buyer in the event that someone might steal his or her new car. The GPS tracking would allow the car to be found before damage was done and keep the car buyer from paying for repairs.

Concerns Over Use

While there are unquestionable benefits to using GPS tracking devices on new and used cars, there are also some causes for concern. You don’t have to be fearful of “Big Brother” to see there is some potential for abuse in this system. As with any computerized system, there is the danger of being hacked. If the bank can prevent your car from starting, couldn’t a criminal do the same? There is also something a little creepy about the fact that a stranger, either in the bank or on the lot, would theoretically be able to know where you are 24/7. While car buyers are notified of the installation of the GPS tracker, it would be fairly common to forget that it is there and be unaware that you are being “watched.”

Yes, But is it Legal?

Just as there are businesses that specialize in putting the GPS trackers on cars, there are other businesses that specialize in taking them off. If you have purchased a car and have found a GPS tracker on it, it is possible that you might be able to find someone to get rid of it for you. If this is the route you go, be aware that you might be breaking your agreement with your lender for the car, and it is important to understand your legal obligations. That being said, Fox News in Phoenix interviewed local police, who said there were no known laws that either prevent you from removing the GPS tracking device, nor were there any that specifically gave the right to place them on your car to dealers.

Perhaps it is an issue that will have to run through the courts before it is decided in any concrete manner. Many of the businesses that specialize in removing the devices had previously been in the business of putting them on. It will be important to make sure you check the credibility of any professional who services your car to make sure they will work ethically with you.

So what is the verdict for this practice? Is putting a GPS tracking device on a used car a smart way to ensure that banks and lenders don’t lose money, or is it simply an invasion of your privacy to know that someone can know where you are at any time? Perhaps the best answer for that is another question: How badly do you need a car? Obviously, there are some concerns about the security issues that are possible, but sometimes you just do what you need to do in order to get back on the road, and that is what many people are choosing to do.

Making it Easier to Borrow Money