You’ve heard of those court-ordered gadgets which force people with prior DUIs to perform a breath-test in order to start their car engine, right? Well as if that wasn’t embarrassing enough, then take a look at this: If you are a risky borrower and you miss an automobile loan payment, this gadget will keep your car from starting.

When the light starts to flash, you had better have the cash.

That’s the reality for millions of subprime borrowers whose used car purchase is contingent upon having an unusual option: a little box mounted underneath the dashboard that forces them to make their payments on time.

A light on the plastic box flashes when a payment is due. If the payment isn’t made and the resulting code punched in to reset the box, the vehicle won’t start. The next step is a visit from the repo man.

I think this device is rather interesting. According to the USA Today article, the device “lowers default rates for subprime auto loan borrowers that typically run about 30% to about 5%.” Can you believe that? Allowing the installation of this device can knock up to 25 percentage points off your loan!

Even so, I can’t help but agree with one of the article’s commenters, rise2it, who said, “”Now anyone riding in your car knows your credit s u c k s.” A generation back, there would have been ’shame’ in this.” Indeed.

Sekurus was founded in 1999 and started selling On Time, as the device is called. It has sold 250,000 at up to $250 each. Most are bought by finance companies or dealers who cater to the most troubled car buyers, those who need basic transportation yet have checkered credit histories.

The box’s LED light starts blinking when a payment is nearly due. On deadline day, the unit not only blinks, but beeps. Motorists find it so annoying that it drives “them absolutely nuts,” Simon says.

When the customer makes the payment, the lender gives them a six-digit code to enter into the box.

Link: USA Today

Via: Consumerist