New box disables car if you miss a payment

May 8th, 2008 ·

New cars being financed may have a special box, called “On Time”, installed to remind you when your bill it due. How convenient? There’s a down side, if you miss a payment the box will take the liberty of disabling you car until you pay up. The box is mounted under your dashboard and works by occasionally blinking as the due date is approaches.The loan company will give you a code to enter every time you make a payment, otherwise the unit will prevent the car from turning on if it isn’t punched in by the due date. Seems like a good idea but it’s just weird this is what it has come to. Makers of the product claim their sales skyrocket as the credit crunch continues. Many companies are not as willing to give out loans but might be convinced if they know they can disable your car if you don’t pay them.

Although consumers get annoyed at the box, the benefit is that it lowers the amount of people who default on loans. Banks are anticipated repossessions this year will hit an all time high. The device lowers default rates for sub-prime auto loan borrowers that typically run about 30% to about 5%, according to Simon. When default rates fall, lenders feel more secure offering financing for more valuable cars to high-risk customers. By forcing buyers to pay on time, the device also rebuilds their credit record.

Luckily, people who have a good credit history should not worry about having one of these units installed as it is marketed towards companies that cater to people with bad credit or those who have defaulted on loans. The makers anticipate the units to be so successful that a model for homes is in the works. That model works by flashing every time you put your keys in the door and will beep as the due date approaches. It then locks the doors and windows if you miss a payment. Okay…maybe not but we can actually see that happening sooner rather than later.