13 ms·

Miss a payment? Good luck moving that car (2014)

60 points by ColinWright 6y ago

Bostonian 6y ago
"But before they can drive off the lot, many subprime borrowers like Ms. Bolender must have their car outfitted with a so-called starter interrupt device, which allows lenders to remotely disable the ignition." Such technology enables subprime borrowers to get car loans at interest rates that are lower than they would be otherwise, because it reduces delinquency rates.
- deleted 6y ago
  [deleted]
- jonnycomputer 6y ago
  Two assertions made without data backing it up: (1) that this reduces the effective delinquency rate (2) that a reduced delinquency rate is being passed to subprime borrowers as savings in reduced interest rates. (1) depends on whether unavoidable, but temporary, delinquency will not have knock-on effects that will exacerbate the likelihood of default, such as losing one's job because you're unable to get to work. (2) I believe that many subprime lenders are counting on being able to repossess the car; it's part of their business model. But I might be wrong about that. (3) in a functioning market, lower delinquency rates might translate into reduce interest rates, but it is not clear to me that it is a functional market, rather than one built explicitly on exploiting subprime borrowers with limited avenues for between lender competition for subprime borrowers.
  - rufus_foreman 6y ago
    >> that a reduced delinquency rate is being passed to subprime borrowers as savings in reduced interest rates What are the barriers to entry for subprime auto lending? Those lenders are ubiquitous in the inner city, so I don't think there is much of a barrier to entry, maybe I'm missing something. If there is no barrier to entry, and reduced delinquency rates aren't being used to reduce interest rates, then that is a problem poor people have that I could help solve by getting rich. In my experience, those type of problems do not exist. For the first assertion, there are some numbers in the article, but beyond that, why would lenders pay for this if it didn't reduce delinquency rates? It would be easy to run the numbers to see if it was worth the price, even a mom and pop shop could A/B test it.
    - jonnycomputer 6y ago
      Having a low barrier to entry is not sufficient for there to be real competition between those in the market. Why? Well, for one thing, subprime borrowers buying cars are probably limited in their ability to shop around. If you cannot do price comparison, then there really is no effect on prices of competition. Firms will compete in other ways, for example, by making themselves more accessible, or limiting access to competitors. Look, the likely thing that is happening is they get a ride to the nearest local dealership, and take whatever loan package they're offering. And if they are doing that, its probably some shady corner dealership anyway.
      - rufus_foreman 6y ago
        >> Having a low barrier to entry is not sufficient for there to be real competition between those in the market. Why? Well, for one thing, subprime borrowers buying cars are probably limited in their ability to shop around Everybody's got a phone. And everybody can ask around, places get reputations. If you offer significantly better rates than the competition, you will get a good reputation. >> Look, the likely thing that is happening is they get a ride to the nearest local dealership, and take whatever loan package they're offering That's not what I did when I was poor, and it isn't what the other poor people I knew did.
  - SilasX 6y ago
    That's the great part about markets: If you think the terms are unfair or overestimate the default risk, you can offer car loans at the same or lower rates without such odious restrictions! (Or invest in someone who does &c.) If no one's willing to do it, then maybe they're actually calibrating the risk correctly?
    - jonnycomputer 6y ago
      Or there are market frictions that limit the ability of subprime borrowers from actually shopping around.
      - SilasX 6y ago
        That would be a hard case to make: https://www.google.com/search?q=auto+loan https://www.google.com/search?q=auto+loan
- arrosenberg 6y ago
  In that case, it seems like there is a social problem with a system that creates "subprime borrowers" that both need a car to survive, and can only get one under feudal conditions.
  - oh_sigh 6y ago
    It can be a social problem, it can also be an individual problem. A lot of people want a nicer car than they can afford. I make well into 6 figures as a programmer, and drive a year 2000 Civic which cost me ~4 days of my salary. A friend of mine makes 40k/yr as a bike mechanic and drives a 2017 Civic and it cost him ~6 months of his salary. In a more rational world our car ownership would be swapped.
    - Xcelerate 6y ago
      Isn’t there also a pretty big difference in crash safety though between the 2000 and 2017 Civic? I’d rather work a few more days for a higher chance of surviving a crash.
      - throwawayboise 6y ago
        Somewhat, but by 2000 cars were pretty safe. At least, some were. You could look for brands that were leading the way on safety, such as Mercedes or Volvo.
    - arrosenberg 6y ago
      Not really an individual problem, even then. Usury is one of the most legislated-on topics in history, and allowing solutions like the one described in the article is a societal choice. Your anecdote aside, most of the people borrowing on these terms are doing it out of necessity, and the ones who aren't should be told No.
- nulbyte 6y ago
  I assure you, disabling one's transportation and, thus, reducing one's likelihood to arrive to work on time does not reduce delinquency. Neither are subprime lenders interested in reducing delinquency; rather, they rationalize such abhorrent practices that increase the likelihood of delinquency because it generates more revenue.
  - modularform123 6y ago
    I assure you there are many liberals who won’t pay despite having money in the bank, unless they are forced to do so. It is literally a human right to them.
  - goldcd 6y ago
    Sorry, how is their provoking of delinquency in any way more profitable than getting that 29% APR on an overpriced piece of junk, hitting their bank account each month?
  - rsync 6y ago
    "I assure you, disabling one's transportation and, thus, reducing one's likelihood to arrive to work on time does not reduce delinquency." You are correct, of course, for any one particular borrower. However, I suspect the aggregate delinquencies drop as marginal "delinquents", aware that their car is going to cease functioning, adjust their behaviors throughout the month, etc., to make absolutely sure the car payment is made. I'm not defending the practice, I merely suggest that your (correct) observation about individual borrowers doesn't negate a net-positive result for the lender.
  - polishdude20 6y ago
    Yeah you better believe that if I can't pay off my car and you disable it. It'll make it an order of magnitude more difficult to now pay for the car. People don't miss payments because they have the money but choose not to pay. They miss payments because they can't afford them. Preventing job access is a quick ticket to poverty town.
    - sokoloff 6y ago
- ByteJockey 6y ago
  I doubt it reduces delinquency rates that much. If you don't have the money, you don't have the money. But I bet it makes it much more likely for the lender to be able to get the car back in the event of a default (and probably cheaper to recover). This probably does result in them extending credit to people they otherwise wouldn't.
  - oh_sigh 6y ago
    From the article: "A leading device maker, PassTime of Littleton, Colo., says its technology has reduced late payments to roughly 7 percent from nearly 29 percent." It's rarely the case that people don't have the money. It's that they have the money, but they'd rather spend it on other things, like food, or entertainment.
    - mrstone 6y ago
      Funny you'd lump food in with entertainment.
      - zepto 6y ago
        How did they ‘lump them in’? They both seem like things someone would prefer to spend money on than a car payment.
    - goldcd 6y ago
      Yes - none of this is magically making the borrower have more money. The sole purpose of this device is to ensure that from an amount of money that doesn't cover their outgoings, the car payment has a higher priority and is more likely to be paid.
  - jonnycomputer 6y ago
    Having worked repo for a summer, I believe this. We'd drive hundreds of miles in a day, only to find the vehicles not where we thought they'd be.
- klyrs 6y ago
  So you're parked in a spot that becomes a towaway zone at 7am, but you can't start your car, can't get to work. You're fired with cause, ineligable for unemployment, and your car is impounded. In this situation, the lender is more likely to get paid? I think not
  - true_religion 6y ago
    In the event that you are that close to being unable to pay your debt, the lender would probably just want the car you are borrowing back so they can use it themselves and/or lend it to someone else.
- effingwewt 6y ago
  Not even close, the rates are far more onerous, and often require bi-weekly payments which also doubles the chance for late/missed payments and thus increases the lot's chance of re-selling the vehicle again. The lenders, as ever, are the only ones benefitting.
sys_64738 6y ago
At least there are documented ways to disable these devices. A lender with a lien on a 16yo mini-van is just so wrong. Putting a snooping device and starter disabler on it are criminal.
- sokoloff 6y ago
  Don’t forget that these customers don’t have a better option, because of credit, down payment, proof of income, or other factors. Taking away someone’s best option doesn’t help them. Giving them a better option does, but I never see people who are arguing against these practices rushing out to make these loans on favorable terms.
  - smabie 6y ago
    Exactly. It seems like some people would rather have the poor not get access to cars at all. Because that's the alternative. It's all about risk adjusted return: if the lenders can lend with lower risk, they can lower interest rates to their existing borrowers, or expand to less credit worthy borrowers and keep the interest rate the same.
benjohnson 6y ago
If you do know someone who is broke and needs transportation you can do them a huge favor - gide them through the process and help them pick a reliable car at a fair price. Having someone along to be by their side will help keep the pretators at bay.
- zachshefska 6y ago
  Yes! The current car buying process takes advantage of the consumer. This is entirely why I started working on https://yourautoadvocate.com/ https://yourautoadvocate.com/ a year ago.
- advisedwang 6y ago
  Are you suggesting that all a broke person needs to solve their transport situation is better advice? That's kind of patronizing. They are broke - affording it is the hard part. If you really want to help co-sign on financing, lend them a vehicle, offer to car-pool etc
  - benjohnson 6y ago
    Most everybody needs a buddy to help them with the car buying process to navigate car dealership tricks. Dealerships are well oiled machined designed to extract money and they have years of practice. Poor people need even more help give they have no room for error.
    - yellowapple 6y ago
      And to be clear, even if you ain't poor, and even if you consider yourself "smart" in this regard, a second set of eyes is invaluable.
  - throwawayboise 6y ago
    If you're going to co-sign a loan, just plan on buying the person the car as a gift.
  - lmilcin 6y ago
burlesona 6y ago
The shameful fact is that we have not only enthusiastically embraced - but required by force of law - that Americans cannot participate in the economy without a private vehicle maintained in good repair. Perhaps in the 50's you could say "well there are plenty of pre-car places you can still live and work," but first we spent the 60's bulldozing those places to put in freeways and parking lots, then most of them hollowed out as the jobs moved to the suburbs, and now, strangely enough, they're revitalizing as lifestyle areas that are very expensive to live in. This, more than anything, has cut off the bottom rungs of the economic ladder. We're not going to fix any of the major societal issues in the US until we fix our suburban development pattern. We need to quit spreading dense splatters of suburban homes butter thin between massive gaps of poorly utilized land (aka "leapfrog development" made possible only because subdivisions get to externalize their infrastructure and public service costs), stop hyper regulating development so that it takes years of professional work to get a simple building permit, and design for safe pedestrian access as a first priority, so that car ownership becomes optional rather than mandatory. When it comes to housing and development we live in a state planned economy and it's failing us just as surely as all the others.
- cpursley 6y ago
  This is one of the main reasons I won't be moving back to the US if I if I can avoid it. Moving to a place built for humans is absolutely life changing. Whenever people where I now live ask what America is like I explain that you can't even purchase food without first owning a car (with a few exceptions).
  - alostpuppy 6y ago
    I live in a nice semi dense area and our one walkable food outlet closed last year. We technically live in a food desert.
  - axaxs 6y ago
    May I ask where you live now, and also in what ways it's built for humans? Just intrigued.
  - 6y ago
mmcconnell1618 6y ago
The lender's risk is significantly reduced by having constant GPS access and the ability to disable the vehicle. I'm sure they've reduced the super high interest rates they were charging these borrowers with subprime credit scores, correct? Nope. Same high interest rates.
- SilasX 6y ago
  If someone else charged the same interest rates but didn’t have these provisions, they would go there. These loans are taken out by people that would have to pay still-higher rates.
- smabie 6y ago
  You think the interest rate stays the same given the same borrower credit with and without these devices? I kind of doubt it.
Animats 6y ago
(2014)
- dang 6y ago
  Added above. Thanks!
908B64B197 6y ago
I'm curious about the economics of that market segment. How often can the seller repossess a car successfully (I assume these devices makes it way easier to do so). And how often is the vehicle in a good enough condition that it can be resold? Repossession has a cost, but how many months are required to be able to repossess and turn a profit by then reselling the car?
- rtkwe 6y ago
  > And how often is the vehicle in a good enough condition that it can be resold? Kind of an implicit assumption in that question that just because the owner is missing payments and has bad credit they're dirty or the car is beat to hell. Any ways there's markets for cars in every shape between pristine and just on the usable side of totaled. > how many months are required to be able to repossess and turn a profit by then reselling the car? They can sell it to an intermediary or send it to auction pretty quickly.
  - geoduck14 6y ago
    >They can sell it to an intermediary or send it to auction pretty quickly. In many cases, the court requires it goes to auction to demonstrate it was sold "at market value". Lenders don't really like to repossess cars - we are in the business of putting people IN to cars, not taking them OUT.
- throwawayboise 6y ago
  They don't rely on reposession to make a profit. That threat is just a stick to keep the loan payments coming in. They make their profit by selling the car for a hefty markup in the first place, and with usurious interest rates. So they take a $1,000 car from auction, sell it for $3,500 or $4,000 at 18% interest, with a loan structured so that all the principal is paid at the end, it doesn't take long for them to be in the black even if they have to repo it.
  - hakfoo 6y ago
    Actually, from what I understand, the Buy-Here-Pay-Here car dealership model frequently revolves around the assumption the car will be reposessed and resold several times. https://www.latimes.com/projects/la-fi-buyhere-payhere/ https://www.latimes.com/projects/la-fi-buyhere-payhere/
nja 6y ago
> In Austin, Tex., a large subprime lender used a device to track down and repossess the car of a woman who had fled to a shelter to escape her abusive husband [ ... ] The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband? I can't stop re-reading "a clause in her auto loan contract that restricted her from driving outside a four-county radius". Is that a normal thing in auto loans? Restricting free movement? How is that even legal?
- globular-toast 6y ago
  Why would it be illegal? It's their car. They set the rules.
  - lotsofpulp 6y ago
    I don't understand why you are downvoted. The options were for this lender to not lend this person a car, or lend this person a car with certain conditions reducing the lender's risk to acceptable levels. Car sales aren't a monopolized business, and there's plenty of competition, so I also don't see any evidence of collusion on the side of the sellers.
  - lmilcin 6y ago
    It is not their car. The car is a collateral. There is a difference. Also, they don't "set" the rules. The rules are set in a contract and contract is bilateral.
    - globular-toast 6y ago
      It's their car until you sign the contract that they wrote.
- geoduck14 6y ago
  Hi! I work for a large auto loan lender. I have NEVER heard of a practice limiting where you can drive your car. I would imagine it would be bad for business (e.g., here's a car, you can't use it that much, have fun!). Personally, I would protest VERY loud if I found my company was doing this. Also, I'm mostly certain we do have trackers on many of our cars, and I would imagine the data is transmitted securely so husbands can't use that signal.
neonate 6y ago
https://archive.is/uzKTp https://archive.is/uzKTp
dang 6y ago
Discussed at the time: Miss a Payment? Good Luck Moving That Car - https://news.ycombinator.com/item?id=8365129 https://news.ycombinator.com/item?id=8365129 - Sept 2014 (80 comments)
tyingq 6y ago
If you find the black box, and identify the make/model (like "Passtime Trax-4V GPS") there's a ton of YouTube videos on how to bypass the ignition lockout while leaving the box itself untouched. It's typically just making a jumper wire for a cheap relay that's outside of the black box.
throwaway210402 6y ago
We're sadly moving towards everything being leased, rented, or "as a service". The ideal future for corporate take over is where they own the fundamentals of your "free" life, and they can shut you down at any time.
11235813213455 6y ago
I think we should all try to never contract any loan, whatever your profession, income, age,... You just do without until you can really afford it, you try to cut down your expenses as much as possible. For example you avoid having children too early Loans encourage over-consumerism The only exception is maybe student loans, I don't know much about this because I've studied in France where education is almost all free till the end (engineering degrees) Even for a house/apartment, I saved up for about 15 years and then I could buy one
- nix23 6y ago
  True but i think the only one entity who is legally able to give private, non-business, non-mortage loans should be the state, a fair, justified loan with peoples who can help you (make the calc, give you alternatives etc), without the interest to suck you dry, but help you on the way so you can pay your/more taxes in the future.
- yellowapple 6y ago
  > You just do without until you can really afford it That's much easier said than done in a society where reliable personal transportation is frequently a condition of being able to afford anything. Kinda hard to earn money if you can't get to work. Ideally, there'd be some sort of socioeconomic safety net - like, say, a universal basic income - to provide an alternative means to bootstrap one's life and escape poverty. Unfortunately, my country seems to be dragging its feet.
deleted 6y ago
[deleted]

60 points by ColinWright 6y ago

"But before they can drive off the lot, many subprime borrowers like Ms. Bolender must have their car outfitted with a so-called starter interrupt device, which allows lenders to remotely disable the ignition." Such technology enables subprime borrowers to get car loans at interest rates that are lower than they would be otherwise, because it reduces delinquency rates.

deleted 6y ago
[deleted]
jonnycomputer 6y ago
Two assertions made without data backing it up: (1) that this reduces the effective delinquency rate (2) that a reduced delinquency rate is being passed to subprime borrowers as savings in reduced interest rates. (1) depends on whether unavoidable, but temporary, delinquency will not have knock-on effects that will exacerbate the likelihood of default, such as losing one's job because you're unable to get to work. (2) I believe that many subprime lenders are counting on being able to repossess the car; it's part of their business model. But I might be wrong about that. (3) in a functioning market, lower delinquency rates might translate into reduce interest rates, but it is not clear to me that it is a functional market, rather than one built explicitly on exploiting subprime borrowers with limited avenues for between lender competition for subprime borrowers.
- rufus_foreman 6y ago
  >> that a reduced delinquency rate is being passed to subprime borrowers as savings in reduced interest rates What are the barriers to entry for subprime auto lending? Those lenders are ubiquitous in the inner city, so I don't think there is much of a barrier to entry, maybe I'm missing something. If there is no barrier to entry, and reduced delinquency rates aren't being used to reduce interest rates, then that is a problem poor people have that I could help solve by getting rich. In my experience, those type of problems do not exist. For the first assertion, there are some numbers in the article, but beyond that, why would lenders pay for this if it didn't reduce delinquency rates? It would be easy to run the numbers to see if it was worth the price, even a mom and pop shop could A/B test it.
  - jonnycomputer 6y ago
    Having a low barrier to entry is not sufficient for there to be real competition between those in the market. Why? Well, for one thing, subprime borrowers buying cars are probably limited in their ability to shop around. If you cannot do price comparison, then there really is no effect on prices of competition. Firms will compete in other ways, for example, by making themselves more accessible, or limiting access to competitors. Look, the likely thing that is happening is they get a ride to the nearest local dealership, and take whatever loan package they're offering. And if they are doing that, its probably some shady corner dealership anyway.
    - rufus_foreman 6y ago
      >> Having a low barrier to entry is not sufficient for there to be real competition between those in the market. Why? Well, for one thing, subprime borrowers buying cars are probably limited in their ability to shop around Everybody's got a phone. And everybody can ask around, places get reputations. If you offer significantly better rates than the competition, you will get a good reputation. >> Look, the likely thing that is happening is they get a ride to the nearest local dealership, and take whatever loan package they're offering That's not what I did when I was poor, and it isn't what the other poor people I knew did.
- SilasX 6y ago
  That's the great part about markets: If you think the terms are unfair or overestimate the default risk, you can offer car loans at the same or lower rates without such odious restrictions! (Or invest in someone who does &c.) If no one's willing to do it, then maybe they're actually calibrating the risk correctly?
  - jonnycomputer 6y ago
    Or there are market frictions that limit the ability of subprime borrowers from actually shopping around.
    - SilasX 6y ago
      That would be a hard case to make: https://www.google.com/search?q=auto+loan https://www.google.com/search?q=auto+loan
arrosenberg 6y ago
In that case, it seems like there is a social problem with a system that creates "subprime borrowers" that both need a car to survive, and can only get one under feudal conditions.
- oh_sigh 6y ago
  It can be a social problem, it can also be an individual problem. A lot of people want a nicer car than they can afford. I make well into 6 figures as a programmer, and drive a year 2000 Civic which cost me ~4 days of my salary. A friend of mine makes 40k/yr as a bike mechanic and drives a 2017 Civic and it cost him ~6 months of his salary. In a more rational world our car ownership would be swapped.
  - Xcelerate 6y ago
    Isn’t there also a pretty big difference in crash safety though between the 2000 and 2017 Civic? I’d rather work a few more days for a higher chance of surviving a crash.
    - throwawayboise 6y ago
      Somewhat, but by 2000 cars were pretty safe. At least, some were. You could look for brands that were leading the way on safety, such as Mercedes or Volvo.
  - arrosenberg 6y ago
    Not really an individual problem, even then. Usury is one of the most legislated-on topics in history, and allowing solutions like the one described in the article is a societal choice. Your anecdote aside, most of the people borrowing on these terms are doing it out of necessity, and the ones who aren't should be told No.
nulbyte 6y ago
I assure you, disabling one's transportation and, thus, reducing one's likelihood to arrive to work on time does not reduce delinquency. Neither are subprime lenders interested in reducing delinquency; rather, they rationalize such abhorrent practices that increase the likelihood of delinquency because it generates more revenue.
- modularform123 6y ago
  I assure you there are many liberals who won’t pay despite having money in the bank, unless they are forced to do so. It is literally a human right to them.
- goldcd 6y ago
  Sorry, how is their provoking of delinquency in any way more profitable than getting that 29% APR on an overpriced piece of junk, hitting their bank account each month?
- rsync 6y ago
  "I assure you, disabling one's transportation and, thus, reducing one's likelihood to arrive to work on time does not reduce delinquency." You are correct, of course, for any one particular borrower. However, I suspect the aggregate delinquencies drop as marginal "delinquents", aware that their car is going to cease functioning, adjust their behaviors throughout the month, etc., to make absolutely sure the car payment is made. I'm not defending the practice, I merely suggest that your (correct) observation about individual borrowers doesn't negate a net-positive result for the lender.
- polishdude20 6y ago
  Yeah you better believe that if I can't pay off my car and you disable it. It'll make it an order of magnitude more difficult to now pay for the car. People don't miss payments because they have the money but choose not to pay. They miss payments because they can't afford them. Preventing job access is a quick ticket to poverty town.
  - sokoloff 6y ago
ByteJockey 6y ago
I doubt it reduces delinquency rates that much. If you don't have the money, you don't have the money. But I bet it makes it much more likely for the lender to be able to get the car back in the event of a default (and probably cheaper to recover). This probably does result in them extending credit to people they otherwise wouldn't.
- oh_sigh 6y ago
  From the article: "A leading device maker, PassTime of Littleton, Colo., says its technology has reduced late payments to roughly 7 percent from nearly 29 percent." It's rarely the case that people don't have the money. It's that they have the money, but they'd rather spend it on other things, like food, or entertainment.
  - mrstone 6y ago
    Funny you'd lump food in with entertainment.
    - zepto 6y ago
      How did they ‘lump them in’? They both seem like things someone would prefer to spend money on than a car payment.
  - goldcd 6y ago
    Yes - none of this is magically making the borrower have more money. The sole purpose of this device is to ensure that from an amount of money that doesn't cover their outgoings, the car payment has a higher priority and is more likely to be paid.
- jonnycomputer 6y ago
  Having worked repo for a summer, I believe this. We'd drive hundreds of miles in a day, only to find the vehicles not where we thought they'd be.
klyrs 6y ago
So you're parked in a spot that becomes a towaway zone at 7am, but you can't start your car, can't get to work. You're fired with cause, ineligable for unemployment, and your car is impounded. In this situation, the lender is more likely to get paid? I think not
- true_religion 6y ago
  In the event that you are that close to being unable to pay your debt, the lender would probably just want the car you are borrowing back so they can use it themselves and/or lend it to someone else.
effingwewt 6y ago
Not even close, the rates are far more onerous, and often require bi-weekly payments which also doubles the chance for late/missed payments and thus increases the lot's chance of re-selling the vehicle again. The lenders, as ever, are the only ones benefitting.

sys_64738 6y ago

At least there are documented ways to disable these devices. A lender with a lien on a 16yo mini-van is just so wrong. Putting a snooping device and starter disabler on it are criminal.

sokoloff 6y ago
Don’t forget that these customers don’t have a better option, because of credit, down payment, proof of income, or other factors. Taking away someone’s best option doesn’t help them. Giving them a better option does, but I never see people who are arguing against these practices rushing out to make these loans on favorable terms.
- smabie 6y ago
  Exactly. It seems like some people would rather have the poor not get access to cars at all. Because that's the alternative. It's all about risk adjusted return: if the lenders can lend with lower risk, they can lower interest rates to their existing borrowers, or expand to less credit worthy borrowers and keep the interest rate the same.

benjohnson 6y ago

If you do know someone who is broke and needs transportation you can do them a huge favor - gide them through the process and help them pick a reliable car at a fair price. Having someone along to be by their side will help keep the pretators at bay.

zachshefska 6y ago
Yes! The current car buying process takes advantage of the consumer. This is entirely why I started working on https://yourautoadvocate.com/ https://yourautoadvocate.com/ a year ago.
advisedwang 6y ago
Are you suggesting that all a broke person needs to solve their transport situation is better advice? That's kind of patronizing. They are broke - affording it is the hard part. If you really want to help co-sign on financing, lend them a vehicle, offer to car-pool etc
- benjohnson 6y ago
  Most everybody needs a buddy to help them with the car buying process to navigate car dealership tricks. Dealerships are well oiled machined designed to extract money and they have years of practice. Poor people need even more help give they have no room for error.
  - yellowapple 6y ago
    And to be clear, even if you ain't poor, and even if you consider yourself "smart" in this regard, a second set of eyes is invaluable.
- throwawayboise 6y ago
  If you're going to co-sign a loan, just plan on buying the person the car as a gift.
- lmilcin 6y ago

burlesona 6y ago

The shameful fact is that we have not only enthusiastically embraced - but required by force of law - that Americans cannot participate in the economy without a private vehicle maintained in good repair. Perhaps in the 50's you could say "well there are plenty of pre-car places you can still live and work," but first we spent the 60's bulldozing those places to put in freeways and parking lots, then most of them hollowed out as the jobs moved to the suburbs, and now, strangely enough, they're revitalizing as lifestyle areas that are very expensive to live in. This, more than anything, has cut off the bottom rungs of the economic ladder. We're not going to fix any of the major societal issues in the US until we fix our suburban development pattern. We need to quit spreading dense splatters of suburban homes butter thin between massive gaps of poorly utilized land (aka "leapfrog development" made possible only because subdivisions get to externalize their infrastructure and public service costs), stop hyper regulating development so that it takes years of professional work to get a simple building permit, and design for safe pedestrian access as a first priority, so that car ownership becomes optional rather than mandatory. When it comes to housing and development we live in a state planned economy and it's failing us just as surely as all the others.

cpursley 6y ago
This is one of the main reasons I won't be moving back to the US if I if I can avoid it. Moving to a place built for humans is absolutely life changing. Whenever people where I now live ask what America is like I explain that you can't even purchase food without first owning a car (with a few exceptions).
- alostpuppy 6y ago
  I live in a nice semi dense area and our one walkable food outlet closed last year. We technically live in a food desert.
- axaxs 6y ago
  May I ask where you live now, and also in what ways it's built for humans? Just intrigued.
- 6y ago

mmcconnell1618 6y ago

The lender's risk is significantly reduced by having constant GPS access and the ability to disable the vehicle. I'm sure they've reduced the super high interest rates they were charging these borrowers with subprime credit scores, correct? Nope. Same high interest rates.

SilasX 6y ago
If someone else charged the same interest rates but didn’t have these provisions, they would go there. These loans are taken out by people that would have to pay still-higher rates.
smabie 6y ago
You think the interest rate stays the same given the same borrower credit with and without these devices? I kind of doubt it.

Animats 6y ago

(2014)

dang 6y ago
Added above. Thanks!

908B64B197 6y ago

I'm curious about the economics of that market segment. How often can the seller repossess a car successfully (I assume these devices makes it way easier to do so). And how often is the vehicle in a good enough condition that it can be resold? Repossession has a cost, but how many months are required to be able to repossess and turn a profit by then reselling the car?

rtkwe 6y ago
> And how often is the vehicle in a good enough condition that it can be resold? Kind of an implicit assumption in that question that just because the owner is missing payments and has bad credit they're dirty or the car is beat to hell. Any ways there's markets for cars in every shape between pristine and just on the usable side of totaled. > how many months are required to be able to repossess and turn a profit by then reselling the car? They can sell it to an intermediary or send it to auction pretty quickly.
- geoduck14 6y ago
  >They can sell it to an intermediary or send it to auction pretty quickly. In many cases, the court requires it goes to auction to demonstrate it was sold "at market value". Lenders don't really like to repossess cars - we are in the business of putting people IN to cars, not taking them OUT.
throwawayboise 6y ago
They don't rely on reposession to make a profit. That threat is just a stick to keep the loan payments coming in. They make their profit by selling the car for a hefty markup in the first place, and with usurious interest rates. So they take a $1,000 car from auction, sell it for $3,500 or $4,000 at 18% interest, with a loan structured so that all the principal is paid at the end, it doesn't take long for them to be in the black even if they have to repo it.
- hakfoo 6y ago
  Actually, from what I understand, the Buy-Here-Pay-Here car dealership model frequently revolves around the assumption the car will be reposessed and resold several times. https://www.latimes.com/projects/la-fi-buyhere-payhere/ https://www.latimes.com/projects/la-fi-buyhere-payhere/

nja 6y ago

> In Austin, Tex., a large subprime lender used a device to track down and repossess the car of a woman who had fled to a shelter to escape her abusive husband [ ... ] The move to the shelter violated a clause in her auto loan contract that restricted her from driving outside a four-county radius, and that prompted the lender to send a tow truck to take back the vehicle. If the lender could so easily locate the client, Ms. Kleinpeter said, what was stopping her husband? I can't stop re-reading "a clause in her auto loan contract that restricted her from driving outside a four-county radius". Is that a normal thing in auto loans? Restricting free movement? How is that even legal?

globular-toast 6y ago
Why would it be illegal? It's their car. They set the rules.
- lotsofpulp 6y ago
  I don't understand why you are downvoted. The options were for this lender to not lend this person a car, or lend this person a car with certain conditions reducing the lender's risk to acceptable levels. Car sales aren't a monopolized business, and there's plenty of competition, so I also don't see any evidence of collusion on the side of the sellers.
- lmilcin 6y ago
  It is not their car. The car is a collateral. There is a difference. Also, they don't "set" the rules. The rules are set in a contract and contract is bilateral.
  - globular-toast 6y ago
    It's their car until you sign the contract that they wrote.
geoduck14 6y ago
Hi! I work for a large auto loan lender. I have NEVER heard of a practice limiting where you can drive your car. I would imagine it would be bad for business (e.g., here's a car, you can't use it that much, have fun!). Personally, I would protest VERY loud if I found my company was doing this. Also, I'm mostly certain we do have trackers on many of our cars, and I would imagine the data is transmitted securely so husbands can't use that signal.

neonate 6y ago

https://archive.is/uzKTp https://archive.is/uzKTp

dang 6y ago

Discussed at the time: Miss a Payment? Good Luck Moving That Car - https://news.ycombinator.com/item?id=8365129 https://news.ycombinator.com/item?id=8365129 - Sept 2014 (80 comments)

tyingq 6y ago

If you find the black box, and identify the make/model (like "Passtime Trax-4V GPS") there's a ton of YouTube videos on how to bypass the ignition lockout while leaving the box itself untouched. It's typically just making a jumper wire for a cheap relay that's outside of the black box.

throwaway210402 6y ago

We're sadly moving towards everything being leased, rented, or "as a service". The ideal future for corporate take over is where they own the fundamentals of your "free" life, and they can shut you down at any time.

11235813213455 6y ago

I think we should all try to never contract any loan, whatever your profession, income, age,... You just do without until you can really afford it, you try to cut down your expenses as much as possible. For example you avoid having children too early Loans encourage over-consumerism The only exception is maybe student loans, I don't know much about this because I've studied in France where education is almost all free till the end (engineering degrees) Even for a house/apartment, I saved up for about 15 years and then I could buy one

nix23 6y ago
True but i think the only one entity who is legally able to give private, non-business, non-mortage loans should be the state, a fair, justified loan with peoples who can help you (make the calc, give you alternatives etc), without the interest to suck you dry, but help you on the way so you can pay your/more taxes in the future.
yellowapple 6y ago
> You just do without until you can really afford it That's much easier said than done in a society where reliable personal transportation is frequently a condition of being able to afford anything. Kinda hard to earn money if you can't get to work. Ideally, there'd be some sort of socioeconomic safety net - like, say, a universal basic income - to provide an alternative means to bootstrap one's life and escape poverty. Unfortunately, my country seems to be dragging its feet.

deleted 6y ago

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