Miss a Payment? Your Car Stops Running 907
HughPickens.com writes 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."
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."
Oh good (Score:5, Insightful)
I'm glad the finance companies found a way to make "be late on your payment, while you scrounge up money" a worse option for the poor than "let your family starve while you scrounge up money". :-/
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Re:Oh good (Score:5, Insightful)
Lucky for them. All that money they save will help fight the lawsuits they'll have for accidents on freeways and intersections...
Re:Oh good (Score:5, Insightful)
I cant believe the degree to which blame shifting is happening in this thread. How about you meet your financial obligations, or dont take out loans you cant afford?
When you park illegally and they boot your car, do you then complain that you werent able to pick up your sick diabetic daughter from chemotherapy? Or do you have a moment of introspection and ask, "how did I screw up in this situation, and how can I do better?"
Re:Oh good (Score:5, Insightful)
Re:Oh good (Score:5, Informative)
Re:Oh good (Score:4, Informative)
because if you read the article it mentioned that happening to someone driving on the freeway.
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The summary by HughPickens.com says that.
One article says ,"The devices don’t stop a car while moving. But once the engine is off, they stop it from restarting."
Go figure...
Re:Oh good (Score:5, Informative)
http://dealbook.nytimes.com/20... [nytimes.com]
From the NYT:
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 doctorâ(TM)s appointments. One woman in Nevada said her car was shut down while she was driving on the freeway.
From the summary:
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.
HughPickens.com may not be able to write for crap, but he can plagiarize like a motherfucking champ.
Re:Oh good (Score:4, Informative)
There's a reason the entire summary is in a quote bar. Most of them these days are ripped directly from the article.
Re: Oh good (Score:4, Informative)
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FTFA: "Mr. Pena of C.A.G. Acceptance said, “It is impossible to cause a vehicle to shut off while it is operating."
One of them is full of it
Re:Oh good (Score:5, Insightful)
Except that some percentage of that increased value is going to pay for the devices being installed, and their management. And what they're changing, according to the summary is late payments, not non-payments. Meaning the amount of risk mitigation is on the order of a fraction of a percent.
Besides, that decrease in cost does little to handle the situation I described above. It only works if you buy into the neo-liberal notion that more liquidity in an economy always benefits all actors of that economy. I don't.
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Ignoring how easy a device should be to disable. Even if it's not simple to physically disconnect the device for some reason, imagine how easy it'd be to clip the antenna or shield it whatnot. No signal, no disabling. What are they going to do, send a repo man after the car? Well, then the device was useless because that's what they'd have done anyway.
Plus, given that I bet a lot of people with such devices live in bad neighborhoods, I bet there's no shortage of people in the area who could offer hotwiring
Re:Oh good (Score:5, Informative)
A friend of a friend has a car with one of these. It might be possible to bypass it, but blocking the signal isn't the solution. He parked his car in an underground garage, and when he came back it wouldn't start. Turns out if the disabler hasn't received a ping in a certain elapsed time it also disables the starter. He called the loan company, and they had to send a technician to get the car to start, and be able to drive out of the garage.
Re:Oh good (Score:5, Insightful)
Re:Oh good (Score:4, Insightful)
They'd just ignore any bill that you sent them.
Re:Oh good (Score:4, Informative)
It might be possible to bypass it, but blocking the signal isn't the solution. He parked his car in an underground garage, and when he came back it wouldn't start. Turns out if the disabler hasn't received a ping in a certain elapsed time it also disables the starter.
I think a DDoS by anonymous on the servers that send the ping is in the works some time in the future. That would result in literally millions of cars (based on the percentages in TFA) being disabled.
I can understand a "kill switch" as a tool to encourage on-time payments, but not a dead-man's switch. With that sort of design, just about any problem with any part of the system would result in cars that won't run.
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He probably plugged into the device and sent it the startup ping. The bypass was not permanent.
Probably anyone familiar with vehicle electronics with a service manual could figure out where the device is in the system and devise a bypass circuit.
Which may be detectable and void the contract which may result in immediate repossession. There is probably a clause in the contract dealing with tampering.
Re:Oh good (Score:4, Informative)
Which may be detectable and void the contract which may result in immediate repossession.
You don't need to tamper with the device to render it ineffective; just change the wiring of your vehicle so that the device's output has no effect anyways, although there may be a location tracking / other privacy violation in there as well, so you might also consider removing the bit of wiring from your vehicle's electrical system bringing power to the device.
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I don't need a manual to locate such a device, or tell you how to bypass it. All it does is stop power from energizing the starter relay/solenoid. The starter is blindingly easy to find; tracing the "big red wire" back to the solenoid isn't very difficult. The only hard part is physically working in a modern cramped engine bay.
All these people whining that it cut the car off in traffic are probably lying, or exaggerating the events greatly (i.e. they stalled the car at a light and it wouldn't restart.)
Re:Oh good (Score:5, Insightful)
I could probably remove or bypass this anti-nonpayment disabler device in the same way that one could disable a breathalyzer or antitheft starter disabler device, but I don't think that most people could. What they need to do is to define rules for how long a grace-period post-payment-due should be, then make the device in the car itself notify the users through audio playback that they are past-due and have x days or x starts left before the vehicle shuts down until payment is received. That would satisfy a moral obligation to not leave someone stranded without notice, and would also prompt people to make their car payments if it's slipped their mind.
Re:Oh good (Score:5, Insightful)
That's not as big a cost as you think. You see, these kinds of car dealers that specialize in bad-credit buyers expect to repossess the cars eventually. They don't make their money from buying a car and selling it once at a higher price; they make their money from selling, repossessing, and re-selling the same car over and over again, while collecting usurious interest payments in the intervals between sale and repossession. All these devices do is make the cycle more efficient (and thus more profitable) by shortening the time between the first non-payment and the repossession.
Re:Oh good (Score:4, Interesting)
And even you are understating the matter.
I once represented the general manager of the biggest one of those in town on another matter.
Breakeven is on sale: the down payment is set to what they paid at auction. They sell, collect a few payments, repo, sell again . . .
Their idea of a good car is one they get to sell 3 or 4 times.
hawk, esq.
Re:Oh good (Score:5, Informative)
You may not be rich, but you have clearly never been poor.
I, also, buy with cash, even (especially?) products as expensive as cars. But I have known many people for whom that was not an option. Not even on the used market. (I, personally, prefer to buy a car that's about three years old from a representative of the manufacturer. They often buy cars from people who are trading in on a new car. And they also want to keep the brand name in good repute.) But I've known many people who couldn't scrape together enough cash to purchase even an old used are.
Your question of "why people don't just get cheaper cars" is strictly analogous to Marie Antonette's "Let them eat cake." (though to understand this you do need to know that the cake referred to was dough that was caked to the sides of the baking oven during the baking process). For many people that is not an option. (There are, of course, the others. And, yes, foolish people exist. Just about everyon is in one area or another.)
Re:Oh good (Score:4, Insightful)
Where I live a car is not an essential item, it maybe in some places, but people still buy cars that the cannot afford here. Without one you will probably end up healthier anyway. It costs a lot of money to maintain. This may be different in places without public transport.
If you cannot afford to buy a car for cash you probably cannot afford to pay double or triple that price in interest to borrow the money to buy that car. If you borrow to buy the car you are effectively paying a higher price for the car, so if you are broke do you really want to throw your money away? It is a bad decision.
If you actually need a car, and I mean NEED, for example for work, not just really really want because would be more convenient, that logic would change of course but you should still get the cheapest possible car. Be careful you don't convince yourself you need the car, when you really don't, if you try hard enough you can come up reason to justify any purchase. I need a TV to keep up with current events, I need a smart phone, keep up my emails, ... people survived thousands of years without any of these things and you probably can too.
I drive a 1994 Toyota, works fine doesn't break down often. I don't actually need the car.
Re:Oh good (Score:4, Informative)
Poor people don't have any savings. Money is always spent immediately. These are people who buy bus passes 7 days at a time, instead of 30 days, and pay rent on a weekly basis instead of a monthly basis. These are people who have to take out payday loans to pay their overdue electric bill, and only can pay the past due amount, never the full amount. These are the people who don't have bank accounts and pay check cashing fees, prepaid card fees, Western Union fees, money order fees, etc. They don't have 6 months worth of expenses saved up, but that's a lot of us. But these people don't even have one week worth of expenses saved up.
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And what cause-and-effect relation would you suggest between poor people making poor decisions?
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They also make a considerable percentage of their profit from the "downpayment" that the repo-victim will lose when they repo the car. These people require a *weekly* payment for you to keep the car, and a downpayment to get it in the first place. You'll lose all of that when they repossess. But, yes, their money is made by reselling the same car many times.
In my state, they are allowed to still hold the buyer responsible for the remainder of the loan minus the value of the repossessed vehicle. In order to determine the value of the vehicle, though, they are required to sell it. They can't just sell it to themselves, either. So they sell it at private auction to their brother-in-law for bottom dollar and then it ends up back on their lot for sale at 10 times the auction price. Within a year, they can easily end up with tens of thousands of dollars in down pay
Re:Oh good (Score:5, Insightful)
Re:Oh good (Score:5, Insightful)
How do you define predatory? Let's say I lose my job and burn thru my savings and then my car breaks down.
I'm late on my mortgage and have maxed out my credit card. Yes, I did it mostly to myself, but now let's say
I do manage to find a job and don't live in a big city and need to get to work. I'm too risky for someone to give
me a loan but with one of these devices someone who otherwise would not sell me a car might be willing to
take that risk. Is this a predator because they are selling me a car when noone else will?
Same with payday cash loan places. They are willing to loan money to people when banks won't. In exchange
they charge considerably higher interest rates but still probably better than getting a loan from a loan shark
that gets you to pay him back with a baseball bat. Desparate people do desparate things. You can't eliminate
predatory loans without eliminating desparate people. It's much better to regulate it than outlaw it and sometimes
even people who aren't living incorrectly come up short of money when they need it most.
Pay cash (Score:4, Interesting)
There are edge cases, but pretty much anyone who can afford to qualify for a $250/month car loan can afford to find $500 to buy some junker that will probably last 3 months. After 3 months they'll be ahead $250. Again i'm generalizing, but my point remains.
For most people, most of the time, sucking it up and buying a cheap old car for cash will be cheaper for them than buying a car they can't afford. I define affording a car by "have the cash to pay for it", rather than by the seemingly more common definition of "could get a loan for it".
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I bought a car for $1100 when I got out of the Air Force back in 1988. It was a 1980 Malibu with a V6 engine that got a solid 20MPG and looked fair but drove good. 14 years later I sold it to a scrap yard for $300. I'm now driving a 2001 Grand Marquis I bought in 2005 for $10,000 cash and it should last another 5-10 years. I've bought one new car in my life and I'll never take that fucking again. It was nice but a year later it was a used car with 20K on it and a big car payment, big annual taxes and m
Re:Pay cash (Score:5, Insightful)
Being poor can be a real juggling act.
You probably don't have enough liquid assets to pay cash for a big-ticket item, but you can scrape by lots of "easy payments", even those the interest rates may be ruinous. You may, in fact, spend considerable time and effort on juggling bills because you can't pay them all, you simply rotate who gets stiffed that month. And then pay again because there will be penalties and late fees.
Being poor involves a completely different mindset. You can't afford to trade convenience for money because you have no money. You become timid because so many of life's problems can be smoothed out or solved if you have money, but you don't have money. So you take extra care to try and not have those problems.
And, of course, you buy a pair of carboard-soled boots every 6 months because you cannot afford to just up and buy leather-soled boots that will last 6 years, even though in the long run it's cheaper. Because everything has to be done in the short run.
It's all very well to say "pay cash", but you have to have the cash to begin with. If you start out at zero and you have no excess income to save, you're not going to have the cash. If your reserves are low and Tiny Tim breaks a leg, there go all the savings.
Then again, we all know that if they'd just work hard, they would all be billionaires, just like us hard-working folks. Who gives a crap about stupid lazy poor people?
Re:Oh good (Score:4, Insightful)
Payday loans are a scurge on the earth. If you have to resort to one you are already financially toast, and all they do is suck you into a final debt black hole that is nearly impossible to escape.
The need to install an ignition interrupter makes it clear that these loans should not have been made in the first place, and put htese loans into the same category as payday loans. The practice should not be legal, and these customers should simply not qualify for these vehicles in the first place.
There are plenty of ways to rant on the financial misery that is fairly common in our country. We have a weak safety net, basic home accounting/budgeting is either not taught or poorly taught, wages are stagnant, living and working in the USA without a car is a poor option in nearly all parts of the country, etc. These loans and associated practices are just one more symptom of a broad set of problems we have in this country.
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Except that these devices make it possible to lend somebody money for a used car who otherwise wouldn't get a car. Whether the loan is good depends on things in the future, and whether the loan will be made depends on things in the past. If somebody gets a job and needs a car to commute, this sort of loan makes it possible for the guy to slowly get into a better situation.
Re:Oh good (Score:4, Insightful)
Payday loans are a scurge on the earth. If you have to resort to one you are already financially toast, and all they do is suck you into a final debt black hole that is nearly impossible to escape.
Well if you are already "financially toast", then it's pretty easy to escape. Just stop paying back your loans. Your credit score will be ruined, and no one will ever lend you money again. So what? That's where we started and where you wanted to end up anyway.
We don't have a debtor's prison in the USA. The worst punishment you will get for not having money, is that people will stop giving you money. There are even limits on how much your wages can be garnished.
Comment removed (Score:5, Interesting)
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Car loans are the new house loan. A Car Loan Company with a means of dealing with repossession would end up looking at the value proposition you describe. But they want to bundle and sell car loans these days. The buyer of the loan (on a depreciated car) could not really be said to be at low risk because they're not really prepared to do anything should you miss a payment. But a nearly automated lender response to late / non-payment makes these loans more sale-able.
Missed payment remote kill options are
Re:Oh good (Score:5, Insightful)
If you drive off the lot with a loan for a car that is fully depreciated already, and you paid an appropriate amount for the car, even without a down payment, the lender has a relatively small amount of risk.
That's the kicker, right there. These customers do not, nor will they ever, have $2500 for a down payment (If they did, they could buy a "real" car.) These places take vehicles with a bluebook value of $2000-$5000 and sell them for $10,000 or more with little to nothing "down", at the maximum interest rate the law will allow, and with an "as-is" warranty term.
It's usury, plain and simple. These snakes are just waiting for you to slip-up on a payment. Fees for being late are fair. But their goal is to simply repo the very moment you're late with a payment. Because, then, they can repo the car - sell it again (and again, until it can't be sold). Auction it. Then still leave you with a credit-report item for the difference.
A remote kill-switch (and probably GPS for recovery) only increases profits, I'm sure.
Believe it or not, but 95% of 'Merica isn't New York/Chicago/LA/Big-City. Here in Tulsa, there is no public transit to speak of. Unless you plan carefully where you live/work, it's quite difficult - maybe impossible - to live/work/eat without constant access to a car.
Profits over people. It's the American way.
Competition (Score:5, Insightful)
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" if all sellers' costs decrease, competition will drive the price down over time."
Nope. We have seen many time where that does NOT happen, and it never happen equatable.
While technically true, it's as accurate as calculating falling rate while ignoring all other variable. Wind resistance, area of the object, etc.
Fine for introduction teaching, but not fine in the actual real world.
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The price of a loan is the interest rate. If you have a halfway decent credit rating, you can drive often off the lot with a new car at less than 1% interest rate. And the fact that people with "sub prime" credit can get a car loan at all is a sign of lower borrowing cost. In the old days, a jobless single mother wouldn't be able to get a car loan at any interest rate.
Re:Competition (Score:4, Interesting)
They found a group they can charge a lot to for cars people with better credit wouldn't want.
So loans for car companies have gotten cheaper for them in all areas, but the cost for people buying low end cars has gone up.
The cost for people with above 660 credit has gone down.
". In the old days, a jobless single mother wouldn't be able to get a car loan at any interest rate."
I don't know what you mean old days. They certainly could since the 70s. I also don't know why you think they were unemployed when they got their car.
All this does it make it harder for people to get the money to get caught up; which is exactly what they want so they can sell the car again to another person barely making payment. rince, repeat. This is a know tactic
Re:Competition (Score:5, Insightful)
Horseshit.
If all sellers have their costs go down, prices stay the same and profits go up.
Or they get together as a group and decide where to set the price.
Your faith in the market to respond to these ways in a way which isn't anti-consumer is quaint, but it isn't what happens in the real world.
In the real world, corporations have shareholders to answer to, and a lowering of costs doesn't translate into a lowering of prices.
So I have zero faith that your theoretical model of competition in any way matches what actually happens. Because corporations have demonstrated time and time again they aren't interested in such things.
Re:Competition (Score:5, Insightful)
If all sellers have their costs go down, prices stay the same and profits go up.
Profits will go up because they will be able to make loans to people who weren't able to afford the interest rates they would have needed to pay before.
Or they get together as a group and decide where to set the price.
Besides being collusion, which is illegal, your assertion is easily debunked by anyone who has ever purchased a used car. You can play dealers off of one another, or even just buy a car from Craigslist. There are dealers all over the freaking place, and you can get financing from non-dealers. There are far too many parties involved for collusion. The used car market is very close to pure capitalism, except for transaction taxes, registration, proof of insurance, and other regulations which make the transaction too expensive to do frequently.
Re:Competition (Score:5, Insightful)
Wrong - T-Mobile, who doesn't act like a traditional carrier, is SINGLE HANDEDLY driving down rates.
Before they went on their marketing blitzes to let people know, AT&T and Verizon kept raising rates, or suckering people into plans that they'd then drop and replace with more expensive things at the earliest contract excuse.
Not every market has a T-Mobile. The insurance industry is one such market.
The market is not yet at equilibrium. (Score:5, Funny)
Forced competition between even a handful of carriers - long considered oligopolistic - is driving down cell phone pricing plans considerably.
The USA has some of the highest cell phone costs in the developed world.
Let me rephrase: The cellular market in the United States is not yet at equilibrium. Competition is causing prices to become less "highest" over time and to gradually approach the more efficient price seen in other countries.
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Well, no, in Germany, the caller pays their own rate, plus a surcharge for calling a mobile phone; it just shifts the expense to the caller.
Right. And the expense of the caller in Germany is less than the summed expense of the caller and receiver in the US and Canada. That's what they're saying, and that's why they doubled the US and Canadian rates. To make for a fair comparison.
If it's bothering you that they doubled the US and Canadian rates, think of it differently: They're comparing the sum total of both calling and receiving rates for each call. Outside of the US and Canada, the receiving rate is zero, so the total rate is simply the cal
Re:Oh good (Score:4, Informative)
Though perhaps we should stop telling people that they're special and that they deserve everything. They aren't, and they don't. I drove lesser-cars into my 30s until I could afford better. I spent quite a bit of my time repairing my cars too, but those are the breaks when you don't have money, you have to be somewhat self-sufficient. In hindsight I probably could have afforded more or better vehicles, but on the other hand I learned a lot of practical knowledge that helps me to this day.
Re:Oh good (Score:5, Insightful)
...and this is why I have never made a car payment since the early 1990's, when I got a car repo'd while I was off serving in Desert Storm (once I pointed out that the bank broke the law by doing the repo, I discovered the costs of bringing the car back across two states --or a lawyer to fight that-- was way out of scope for an E-4 sergeant's budget.) It was then that I resolved to never, ever make payments on a car again... ever.
Since then, I've driven some outright piles of crap throughout the 1990s, but I've always owned my cars free and clear. I save up the money as best I can until I have enough to buy something newer in reasonably decent condition.
This has progressed from $300-400 hoopties, to a 1988 Mustang (in 1999) for $400, to a 1991 Jeep Wrangler (in 2001) for $4500, to a 2003 Pontiac Sunfire (in 2007) for $7200, to a brand-new 2013 Kia Soul for $14,200.
Each time, I saved my pennies and paid cash, which gave me a drastically lower pricetag, and I own the thing up-front. As a bennie, I still have both the Sunfire and the Soul (my wife drives the latter, and the former is still rolling along just fine at 150k miles), and the Soul is fully covered under warranty for the next 8 years. The Jeep finally died for good in 2013 (too much rust decayed the frame), prompting the new Kia. I gained the advantage of being very handy around a vehicle with tools and knowing junkyards very well, though most of that was self-taught over the years from turning outright shit-piles into decent running cars.
Long story short? Yeah it sucks that you can't drive some NewShiny that gathers all the babes, but start small and build up over time. Save, save, save... and always pay cash. You wind up paying less over the long run, the salesman suddenly wants to kiss your ass, and you get a better deal overall.
Oh, and in many of the cases up there, I managed to sell the older cars for more than I paid for them (though nowadays I figure I'll just drive the ones I have until they finally die for good.)
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I applaud your approach, but I did want to point out that a good $300 car is difficult to find (not to mention that $300 in the 1990s is about $600 today, after inflation, and minimum wage hasn't risen to match). A car in that price range is often going to be unreliable, and a single repair on something significant (transmission, engine, etc) is going to cost as much as the car. Even a new set of tires can be a significant cost burden.
If you're capable of doing your own maintenance, that can bring costs dow
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Never had a car payment of more than $389/mo? Either your definition of "pretty good cars" is different than most or you're financing for more than 5 years.
A $30k car with principal alone would be $500/mo for 60 months.
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In the US and outside of major cities which have some basic form of mass transit... Access to a vehicle can often be a requirement for living.
I live 30 minutes from one of the top 100 cities in the US by population, but their are few jobs here. For a population of 5000 the number of local jobs is around 1200 (it used to be much higher by as much as 3x what it is now). Everyone else must work outside that (usually in the city). Medical care is also at least 20 minutes away. No mass transit options exist at a
Re:Oh good (Score:4, Insightful)
Now, there's an exaggeration. It's a starter interlock - it doesn't stop a running car (despite what the lady who ran out of gas on the highway claimed). If someone drives to, then stops their car in a bad neighborhood, well, that was their choice. If a car isn't maintained, and is so unreliable that it shuts off at intersections and needs restarting, the owner is already putting themselves in danger.
And, of course, they voluntarily entered into a loan contract with this as a requirement - they made a choice there, too.
what's a bad neighborhood in this context (Score:2, Insightful)
>> turning off a car in a bad neighborhood
In other words, where they live?
Could be improved (Score:4, Interesting)
Re: (Score:3)
And, they're starter interlocks, they won't disable a car while it's running, despite what the lady who ran out of gas said.
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Maybe they could make it in the form of a green LED armband so you can always tell how much more car time you have!
Re:Could be improved (Score:5, Funny)
Or they could make it a crystal that gets implanted in poor people's hands that could change color based on their payment standing, from white to yellow to green to red and then flashing red on Lastday.
It's the bank's car (Score:2)
It's not your car until you pay for it. Until then, it's the bank's car.
I question why a single mom with no job has a $389 monthly payment instead of buying a 8 year old used car she could actually afford.
Re:It's the bank's car (Score:4, Informative)
It probably is an 8 year old car. The monthly payment is so high because A) the buyer paid a hugely inflated price, B) it's probably got an incredibly high interest rate, and C) it might even have leftover debt from the previous car (that probably also got repossessed*) rolled in.
Remember, places that prey^W specialize on bad-credit buyers are not really car dealers; they're loan sharks that incidentally let you borrow a car. Here's their business model:
(* Is it possible to still owe money on a car after it's been repossessed? I don't know, but it's certainly possible to claim to a bad-credit car buyer that they do.)
Only single females? (Score:4, Insightful)
What makes a single male any safer in a dangerous neighborhood?
Re:Only single females? (Score:5, Insightful)
They'll rob you, but they probably won't rape you.
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I said "probably", which is true.
I've been robbed at gunpoint. It's no fun, and it made me nervous to be out at night for a long time. Still happens sometimes. With that perspective, I cannot even imagine the trauma that someone who has gone through rape would need to work through. Both are "unsafe propositions", but I don't think they are really comparable events.
Re: Only single females? (Score:3)
On average, less physical strength and higher desirability as a rape target than a single male.
Shall I also explain to you why fire can be bad, and why eating is generally important?
What is the net effect? (Score:5, Interesting)
It would be interesting to see what the net effect of these devices is.
Did it just move a bunch of people from the category of "You can have a car loan and if you don't pay we will go through a long process to repossess your car." to "You can have a car loan but we can shut it off as soon as you miss a payment."
Or did it move people from the category of "You don't get a car loan at all." to "You can have a car loan but we can shut it off as soon as you miss a payment."
I suspect it's both but it would be interesting to know what happens in aggregate.
Re:What is the net effect? (Score:5, Insightful)
I wonder if it moved a lot of cars from "able to repo and sell again to someone else" to "remotely shut down and then reported stolen and torched in a shitty neighborhood."
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Austin dealership hacked == all cars disabled (Score:5, Informative)
This technology isn't new. An Austin car dealer a few years back had something similar where the buyer would pay weekly and punch a code on the receipt on a PINpad or else their car wouldn't start.
IIRC, A disgruntled ex-employee had a valid employee's password, logged on through that, and disabled all cars in the system out of malice, paid customers or not, having all their vehicle horns honk as well until the batteries died.
Not impressed with a system like this. Even after it is removed, the fact that it likely was installed by someone who just hacked and twisted wires at almost random may mean electrical issues down the line.
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If you're happy with a "post-consumer capitalism that no longer expands inexorably", why are you concerned about stagnating wages for everybody but "the one percent"? Seems to me the latter automatically leads to the former, and you can save yourself all that moral outrage and be happy that you got what you wanted.
Not putting gas in your car. (Score:3)
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Well hang on there (Score:5, Interesting)
While I'm not saying we should take the word of the lenders without verification, neither should we take the word of the people who are on the receiving end. They may very well not be telling the whole story. Some people who have financial troubles have them because of their own choices, but they rarely admit it.
I had a roommate like that. He was an alcoholic who wouldn't admit it or deal with it. He continually made bad choices in his life, but would never admit anything was his fault. In terms of finance he never paid things when they came due, he didn't pay until he was forced to. It was "due" according to him when they were about to shut off his service, or the like. So he'd get mad about his cellphone getting shut down when he was "a day late" by which he really mean "45 days past the due date, over 30 days late, and had 2 threatening letters to disconnect."
So before you go jumping to the defense of the people in the article, you might want to see what the terms of something like this is. I don't know, and I'm not saying it isn't a "you have to pay by the second it is due or we shut it off," but it also might well be a normal "It is due on day X, late on day X+15, and we shut it off on day X+20," and the people involved have just decided that "X+20" is the day it is "due".
With regards to #2, where in the US if you call 911 do you not get an ambulance? They are not taxpayer funded, but they are required to take ALL calls. If there's a medical emergency, you'll get transport and treatment, even if you lack the means to pay. That is part of the problem with high healthcare costs (the costs of people who don't pay get rolled in to the people who do) and an excellent argument for universal healthcare at least for emergency treatment.
Re:These people are doing it to themselves (Score:4, Insightful)
Yeah poor people, suck it up and call an ambulance. It's only a couple extra grand tacked on to your hospital bill anyway.
Wait, you mean this whole situation BEGAN with financial problems, and this would only compound the issue? Oh, I guess it isn't so easy as "call an ambulance" and "don't be a stereotype."
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not really a solution. that $999 car will work, kinda, probably, maybe. or it could fail to start at any time because it is a car that you paid $999 for and it is almost certainly not what most people would consider 'reliable transportation.'
Bump the price up to around $4 or $5k, then you might have something reliable enough to count on for work, school, medical emergencies etc. But that is a much more difficult amount of money to scrape up for someone living paycheck to paycheck.
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This isn't 25 years ago. I just got rid of my 12 year old car that had a blue book value of ~$1000. It wasn't the prettiest thing, the trunk latch needed a bit of fiddling to get to open as the spring in the external latch handle was worn out, it leaked oil (slowly, about a liter per month) and it had a few other minor issues with it, and someone had backed into the driver's side door in a parking lot, leaving a dent about the size of a dinner plate. I traded it in, but if I sold it privately I realistic
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It is.
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the car doesn't belong to the driver, it belongs to whoever holds title.
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As is the use of debtor prisons.
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No it isn't. We made a relatively early decision in this country that debt slavery isn't acceptable, nor are debtors' prisons. We also decided you don't necessarily have full rights to your own money when you have an outstanding financial obligation, and that your wages can be legally garnished.
But we also have legal protections to insure that punitive and fiduciary measures don't create undue hardship. We have a pretty good system that does alright at balancing the risk-mitigating concerns of the credit
Re:Uhhh (Score:5, Insightful)
Debt slavery is perfectly legal in the US as long as you call it 'alimony'.
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Re:No credit, no NEW car. (Score:4, Interesting)
That would be great, if the credit system worked.
Sadly people have no real defense against people lying about you and dinging your credit. Something that the collection industry is rife with. People just calling up and saying you didn't pay X bill, pay up. And when you say, yes I did pay X bill, here is the proof, they don't care and ding your credit.
The tech bust was very hard on my assets, in fact it wiped them out, and then we had medical issues. That was 13 years ago.
I had a really nice awaking t the amount of abuse and fraud the collection industry has and how they specifically target people between 590 and 640 credit range.
Did you know that when you look into getting are finance mortgage, your credit can take up to a 13 point hit? Just for trying to get a rate, not for actually getting a lone?
That really surprised me. Why? because during the 90's I wrote software for a credit agency. My software was used to determine scores. At that time it was 1 point, soft hit, gone in 8 weeks.
The fact that yo can take any hit to your credit for shopping for a good loan is stupid and, frankly, mean.
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Strange. I've owned a car (several of them, actually) for a couple of decades and I never made a payment other than the first one I used to buy the car. I've also never paid over $3000 for a car. Something about learning to maintain it yourself and not having much money. Also something about how true ownership beats the pants off someone else having control of my stuff.
Guess as you get paid more, you gather this strange belief that everyone does the same crazy dumb shit that you're doing.
Cars are cash items due to severe depreciation and high maintenance costs. Can't afford to buy it cash? Don't. If you have under $1000 cash (the minimum I find drivable cars selling for) the last thing you need are payments! And if you need it for a job, make sure you pay the car off within a month or two (there's plenty of $2000 jalopies you can pick up at the various fleece-me-blind no-credit car lots that should be priced at $1000 cash).
If you buy a used car, it will run into problems. If you go to a mechanic with even the smallest of problems, they will quote you $500. If you ignore the problem, it will get worse and worse until it is unsafe to drive or the car simply doesn't start at all.
Learning to maintain a car isn't that hard but you can't do it on your apartment parking lot.
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Maybe why usury was forbidden in the bible?
Re:This is evil (Score:5, Insightful)
Not quite. People who gave out NINJA loans to people who had no hope of repaying these loans and then proceeding to misrepresent these loans as AAA were the prime reason for the crisis.
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A credit card that you pay off each month costs you nothing (if you do this you can get any annual fee removed), gives you a one-month+ float, and builds your credit rating. Provided you have the discipline to do this, it's not just for emergencies.
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If it was supermarkets ...
On the other hand if its a rented property there all kinds of protections in place to prevent the landlord from tossing you out on the street the minute your late on a payment.
Maybe we should be protecting the car owners. After all, in the event of a car loan -- the title of the car actually belongs to the person. The bank only has a lien against it, not title to it.
Things get a bit murky as the loan was given 'on-condition that' the disabler be in place. But perhaps the term is u
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What you do see are articles complaining when supermarkets that throw out food at the end of the day, and say, shoo away hungry homeless people from taking it. Or a regulation in New York City that prohibits a restaurant from donating day-old bagels or soup to a food pantry like they used to. Or mortgage-wracked homes standing empty for long periods of time when homeless people roam the streets. These complaints do in fact get legitimate traction. And leaving a perfectly good car disabled in your driveway w
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I thought the legal tender law required a creditor to accept cash as a repayment of debt. So take the loan and pay it off before any interest accrues.
It doesn't say that they need to let you pay back the loan early. If your contract says $500 over 60 months, they have to accept $500 cash every month for the next 60 months and can't demand you pay buy cheque or using a card, but they don't have to accept the full amount in cash at once.