Media stoking the flames of victimhood.

credit

A new meme is flying around the net today.  It has to do with devices installed in cars financed for sub-prime borrowers.  Basically, it shuts down the car if the borrower falls behind in his/her payments.  Shutting the vehicle down and re-enabling it are handled remotely by the lender.

Examples of the travails of the “victims” are plentiful.  They are often inconvenienced, sometimes stranded.  The focus of the articles generally lean towards the “victim” aspect, but they do explain the rationale behind the use of the devices.

Of course lawyers are lining up to sue the evil lenders.

Basically the rationale is as follows:

  • The likelihood of default is high.
  • People who are behind on their payments sometimes go to great lengths to avoid repossession.
  • Use of the device enables lenders to extend credit for car loans to people who otherwise couldn’t get a loan.
  • Borrowers acknowledge the presence of the device at the time of contract signing.

It is amazing to me that anyone feels they are being victimized by this technology.  I guess they feel that they are entitled to keep the cars even if they default.  Examples of the travails are plentiful because their is no dearth of people who are happy to talk about how they have been victimized.

What they’re not talking about is what they would do for transportation if they couldn’t get a loan in the first place.  They’re not talking about the opportunity they are given to re-establish a decent credit rating by virtue of getting a car loan and paying it on time.  They don’t talk about the fact that the only thing they have to do to prevent being “victimized” is to pay the loan monthly or weekly as they promised to at the time of purchase.  They don’t talk about being able to get the car back immediately upon payment.  They don’t talk about the repeated warnings or reminders they get.  They don’t talk about the fact that if they find they are no longer able to meet their obligations they could sell the car and pay off the note.  They don’t talk about the fact that the ignition isn’t disabled until the car is turned off – they’re not driving down the freeway when it happens.

And one aspect of all this that I have not yet read or heard about on the various talk radios shows discussing it is this:  Before the advent of these devices, repossession was pretty much the only recourse the lender had to protect his asset in the event of non-payment.  My understanding of the repossession process is that it usually takes place after several missed payments and repeated requests for payment.  Following repossession, the buyer getting the car back is practically impossible because the lender has no motivation to return it, the back payments have added up to a significant amount which the buyer probably cannot pay, and then there is the cost of the repossession itself – probably $300 plus.  Using this device the buyer is actually in a much better position because the amount owed is more likely to be manageable.  The fact is, the lenders are making a significant investment in the device in order to be able to finance the car for someone who would otherwise be undeserving of credit – they are doing the borrower a favor.

 


I take full responsibility for my own opinions, comments and slurs against asshats.  I'm just another guy with just another opinion. Although, I may be turning into my father who my mother always said was 'the world's foremost authority."



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