Ever have the feeling that you were being followed? That feeling may prove to be a reality if you purchased your car with an auto loan as someone with a poor credit rating. This type of auto loaning has been booming lately, and many finance companies, credit unions, and auto dealers are using technologies to track the location of borrowers’ vehicles in case they need to repossess them. Lenders are also installing devices that enable them to remotely disable a car’s ignition after a borrower misses a payment.
The closer monitoring of these devices in cars purchased by low-income Americans comes as cracks are starting to appear in the red-hot auto loan market. The percentage of auto loans that were at least 90 days delinquent increased to 3.8 percent in the fourth quarter from 3.6 percent in the third quarter, according to the Federal Reserve Bank of New York. The auto finance industry says the benefits of the devices are clear. Without them, many low-income Americans would not be able to buy cars they need to get to work. So far, there is no widespread evidence that lenders are misusing information they track from a vehicle’s whereabouts.
I still think this sounds like a case of “borrower beware.” You may get the loan but your lender will be able to “find” you or even disable your car if you fall behind on your payments. Some say this is all part of living in the age of the “internet of things.”
P.S. I will be away for the next few days. Back on Wednesday, March 8. Thanks for following TechtoExpress.