How auto lenders can disable your car if you miss payment

The auto industry could be reshaped by a repossession device for cars. Special technology makes a vehicle impossible to start after the owner misses a payment. But federal regulators are asking questions about how at least one auto finance company uses the equipment. Anna Werner reports.

The auto industry could be reshaped by a repossession device for cars special technology makes a veal vehicle impossible to start after the owner misses a payment but federal regulators are asking questions about how the equipment is being used and a warner explores the concerns about how the legal devices could hurt people who can least afford it and a good morning

Good morning well imagine getting in your car and it won’t start but not because there’s anything mechanically wrong with it turns out the dealer you bought the car from has turned it off many people around the country say it’s happened to them including the couple we spoke to in st. louis i got real sick willy connor needs a kidney transplant and gets dialysis

Five times a week she needed a car but she and her husband didn’t have a lot of money so commercials like this one for car credit city get the car credit city for a guaranteed car and guaranteed pet offering guaranteed credit sounded good they made it easy you know come on and we’ll give you a car regardless of your credit that dealership is what’s known as a buy

Here pay here auto lender which means the dealership does its own financing on transactions the price was high a 2007 chevy with more than 100,000 miles would cost them over $21,000 after payments at almost twenty nine percent interest nearly six times the national average but i had to get the dialysis i have to get there or i don’t live these are your grandkids

Then one day in 2012 she came out of the treatment center and found the car wouldn’t start why she says even though she had told them she would be a few days late on the payment the dealer had turned the car off dialysis of all places they cut the car how with a device similar to this one it’s something called a starter interrupter technology that combined with gps

Tracking allows a dealer to remotely track the location of a car then disable it from starting as long as the cars not moving connor was left stranded what did that make you feel like like i was just failing at everything everything my health my life everything was a failure this is the gps tracking device your car dealer michael fisher sells the devices he says

They’re needed because many buyers with poor credit default on those high interest loans it is a very risky business i’ve been there i lost a lot of cars which i anything was possible i could find the customer i just couldn’t find the car but there are no federal laws on how to disclose or use the devices and just four states have any regulations and chris kukla

With the center for responsible lending says there are safety concerns you’re on your way to pick your kids up you stopped at the store and suddenly you can’t start your car and your kids are left alone at a school or you there are certainly stories of families where the mom was trying to get a kid to the emergency room and they got out to the driveway and they

Couldn’t start their car even fisher says the dealership should at least know where the vehicles at when they’re shutting it off and the problem kukla says is people who wind up with the devices in their cars often don’t have any other option but to accept them it’s lower income consumers it’s folks with blemished credit who have trouble finding loans elsewhere

They really don’t feel like they have an effective choice to be of whether to take these devices or not and connor says for those who think it won’t happen to them who know you know i didn’t know that this what happened to me you know so you don’t know until you’ve been there now will willie connor told us she was unaware the device was there but she admits there

Could have been some disclosure in the paper she signed when she bought the car the dealership later sued the connors for money they said they were still owed the couple’s attorney says the lawsuit was later dismissed now we reached out to the dealership where the connors bought the car car credit city several times and finally were told by representative that they

Weren’t interested at which point they hung up on me she raises it yeah she raises a really good point you don’t know until you’ve been there but from the business point of view you know going in there saying that we could cut off your car if you don’t pay the loan so we expect you to pay the loan and some of the dealers like michael fisher would say look they can

Come repossess the car at least this way maybe you have a chance to keep the car so the question is do you know when you get a car like this what it is and are you okay with and are you not getting stranded at kidney dialysis or in a bad neighbor – it’s gonna be late right all right thank you very much anna

Transcribed from video
How auto lenders can disable your car if you miss payment By CBS Mornings