SoylentNews is people
SoylentNews
from the scorn-the-poor-man-as-a-thief-in-country-and-in-towne dept.
Auto loans to borrowers considered subprime, those with credit scores at or below 640, have spiked in the last five years with roughly 25 percent of all new auto loans made last year subprime, a volume of $145 billion in the first three months of this year. Now the NYT reports that before they can drive off the lot, many subprime borrowers must have their car outfitted with a so-called starter interrupt device, which allows lenders to remotely disable the ignition. By simply clicking a mouse or tapping a smartphone, lenders retain the ultimate control. Borrowers must stay current with their payments, or lose access to their vehicle and a leading device maker, PassTime of Littleton, Colo., says its technology has reduced late payments to roughly 7 percent from nearly 29 percent. “The devices are reshaping the dynamics of auto lending by making timely payments as vital to driving a car as gasoline.”
Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start. Bolender was three days behind on her monthly car payment. Her lender remotely activated a device in her car’s dashboard that prevented her car from starting. Before she could get back on the road, she had to pay more than $389, money she did not have that morning in March. “I felt absolutely helpless,” said Bolender, a single mother who stopped working to care for her daughter. Some borrowers say their cars were disabled when they were only a few days behind on their payments, leaving them stranded in dangerous neighborhoods. Others said their cars were shut down while idling at stoplights. Some described how they could not take their children to school or to doctor’s appointments. One woman in Nevada said her car was shut down while she was driving on the freeway. Attorney Robert Swearingen says there's an old common law principle that a lender can’t “breach the peace” in a repossession. That means they can’t put a person in harm’s way. To Swearingen, that would mean “turning off a car in a bad neighborhood, or for a single female at night.”
(Score: 4, Insightful) by Sir Garlon on Friday September 26 2014, @03:15PM
In my state there are regulations for how, when, and under what conditions the electric company can disconnect a customer's service. They have to give notice, there's a waiting period, etc. The process exists to protect the rights of the customer. You seem to be suggesting that someone who is three days late on a car payment should have no rights.
And as a taxpayer and health-insurance subscriber, I resent your recommendation that people in financial difficulty resort to emergency services. It is much cheaper to drive to the walk-in clinic than to call an ambulance. "Let them eat cake --" at the taxpayer's (or insurance pool's) expense.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 2) by tibman on Friday September 26 2014, @03:21PM
There's no need to paint me as a bad guy. So, let's give someone two months of non-payment before turning their car off. Just like electric. I totally support this. But this article would still exist and the situations would be exactly the same. Someone will be driving on a car that is three payments behind and get disabled while idling in an intersection.
SN won't survive on lurkers alone. Write comments.
(Score: 2) by Sir Garlon on Friday September 26 2014, @04:05PM
Nothing personal, sorry. Your tone offended my bleeding heart, I guess. :-)
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 3, Insightful) by urza9814 on Friday September 26 2014, @04:27PM
Actually, in many states (at least RI and PA, the two I've lived in) the electric company can't always shut you off for non-payment. You can owe them $5,000, they still can't shut you off if, say, it's the middle of December. Or if you have medical equipment that requires power. No matter how much you owe them, they MUST continue providing service if cutting it off could put you in a life-threatening situation. Same goes for many other utilities -- gas company can't shut you off in the middle of winter either.
Same rule should apply to these asshats. They can't shut your car down in the middle of the freeway. No matter how much you owe. A couple hundred bucks is not worth more than a human life.
Besides, if they don't think they can pay off the loan, why the hell are they giving them the money in the first place? They're trying to establish a situation where they can loan people money they know they can't pay back, and then take full control over their life when that happens. We've already brought back debtor's prisons; what next? Nonpayment is the cost of doing business. It's a risk you take as a creditor. These guys need to start taking some responsibility for their own decisions regarding who they loan to...but why bother when the government will bail them out every time? When the government will let them use OUR tax dollars and OUR police officers to recover their losses?
(Score: 2) by tibman on Friday September 26 2014, @05:48PM
Ah, i totally get and agree with not shutting off life-support. I also agree that it should be illegal to turn anyone's car off while it is in motion (or even turned on!). But i'd like to point out that having a car disabled seems far better than having it repo'd. It also seems like the whole point of this program is to provide another incentive to pay the car bill on time. It's not supposed to screw people over, as far as i can tell. Though it appears to be doing just that.
SN won't survive on lurkers alone. Write comments.
(Score: 3, Interesting) by urza9814 on Friday September 26 2014, @05:53PM
Yeah, I mean it is better than getting repo'd.
The way I see it though...by making the car payment higher priority as others have discussed, the loan is less risky. So the lender has a greater chance of getting it paid. So they should be able to charge a lower interest rate. So be up-front about that. Give people a 5% or whatever reduction on the interest rate if they agree to have these devices installed. That's fine.
But instead they're making these mandatory, and likely just pocketing the difference. In which case: fuck 'em.
(Score: 2) by tibman on Friday September 26 2014, @06:24PM
Agreed!
SN won't survive on lurkers alone. Write comments.
(Score: 2) by mhajicek on Friday September 26 2014, @09:23PM
I had a car repod once because the car company neglected to take their automatic payment and also didn't bother sending a bill.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 2) by mojo chan on Saturday September 27 2014, @08:53AM
They sell the car with the expectation that it will get repossessed. That way they can throw it in an auction where it sells for next to nothing to their friends. They buy the car and sell it again for a nice profit while still chasing the person who defaulted for the remainder of their loan. Essentially they can sell the same car over and over again, while collecting a loan for something the person no longer has.
const int one = 65536; (Silvermoon, Texture.cs)
(Score: 2, Informative) by arashi no garou on Friday September 26 2014, @04:28PM
The difference is that at least by the second month, the car buyer would have had time to make arrangements, return the car for repossession, etc. Three days? If they are a busy person, perhaps working two jobs and balancing kids and school, three days is easily overlooked. Also, disabling the car actually makes it harder to make the payment; how do you hustle up the money and get it to the lender the same day, if you can't drive?
At the very least, they should get a written reminder a couple of weeks before this type of enforcement can be used, explaining that it will be enforced after X date. That's what the utilities do; they don't just cut off your power or water, you get a notice saying when it will be cut off.
(Score: 2, Interesting) by Anonymous Coward on Friday September 26 2014, @03:42PM
Really? You have to pay for ambulances in the USA? My god, your healthcare system is fucked up. What next, paying to call the cops?
(Score: 4, Insightful) by Sir Garlon on Friday September 26 2014, @04:04PM
Most ambulances in the US are operated by private, for-profit companies. I don't know the going rate for ambulance service but last I needed an ambulance, the bill was $900. That was in 1986. The cost is completely hidden of course -- you call the ambulance, it takes you to the hospital, no one mentions price, and two weeks later you get a bill for $1000 or $2000 or $7000 (I have no idea the current rates). Let's just say the ambulance companies are in a strong position to set their own prices. Insurance companies usually work out a deal with the ambulance companies where their customers get a deep discount and the insurer pays the rest. If you don't have insurance, or if your insurance does not have a crooked little deal with the ambulance company, then they charge you the full, non-discounted rate.
I assure you, our healthcare system is more deeply fucked up than you, a foreigner, would dare to imagine. This is just one tiny facet of it, so inconsequential when viewed in perspective that people don't even complain about it.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 0) by Anonymous Coward on Friday September 26 2014, @05:52PM
our healthcare system is more deeply fucked up than you, a foreigner, would dare to imagine
There's a guy who was top executive at one of these for-profit outfits who oversaw massive fraud and abuse. [google.com] Details [wikipedia.org]
He has gone on to be elected Governor by the people of Florida.
-- gewg_
(Score: 1) by SacredSalt on Saturday September 27 2014, @12:22PM
Indeed... All the ambulance did for me was put in a line to my arm (with no fluids) and transport me. They didn't give me the actual oxygen I needed even though my O2 sats were extremely low -- they waited to let the hospital do that. Then the billed $1500, which is roughly 500 per mile they transported me.
Goody!
(Score: 2) by meisterister on Friday September 26 2014, @10:58PM
Wouldn't surprise me. This story is 4 years old, but at least somewhere in this country we basically have to pay to call the fire department:
http://www.nbcnews.com/id/39516346/ns/us_news-life/t/no-pay-no-spray-firefighters-let-home-burn/#.VCXuxpWoJkU [nbcnews.com]
Welcome to America: The Land of Endangering People to Make Money (tm) and Something About Liberty or Freedom or Bravery or Somesuch.
(May or may not have been) Posted from my K6-2, Athlon XP, or Pentium I/II/III.
(Score: 1) by kryptonianjorel on Saturday September 27 2014, @12:40AM
NO!
That story is about a town who pays for a fire department, and the residents of the surrounding county NOT paying for their own fire department. The residents of the CITY pay with their taxes, but the residents of the surrounding county do not. Thus the fire department of the city allowed the residents of the surrounding area to pay something like $20/year for fire protection. The house that burned down refused to pay the fee TWICE, and then got upset as the fire department let their house burn to the ground
Its the equivalent to trying to buy insurance once you need it.
(Score: 2) by meisterister on Saturday September 27 2014, @12:54AM
Alright, fair enough. I was hard-pressed to find an example. It's just that that sort of thing really wouldn't surprise me anymore.
(May or may not have been) Posted from my K6-2, Athlon XP, or Pentium I/II/III.
(Score: 0) by Anonymous Coward on Friday September 26 2014, @04:34PM
Sir Quarrel-on? Is that you? How about a modicum of civility?