Q&A

More auto lenders willing to finance GPS system

Maledon: GPS as a vehicle inventory management system is gaining more traction as an F&I product.
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GPS systems supplier Inilex has been successful lately in getting its SkyLink GPS-based anti-theft system approved by auto lenders for financing on vehicle loan contracts, a big selling point for auto dealers.

SkyLink is sold in 600 dealership F&I departments. From 2009 to 2011 the system, under the name SmartAlert, was offered in U.S. Ford and Lincoln-Mercury dealerships as a Ford-authorized accessory.

In January, Chase Auto Finance approved SkyLink for an advance that allows customers to include the price of the device in their auto loans. This month, another "major national auto financier" did too, Inilex, based in Phoenix, says, although it won't identify the company.

The captive finance company for used-car retailer DriveTime also will finance SkyLink, Inilex CEO Michael Maledon says.

Maledon spoke with Automotive News Special Correspondent Jim Henry in New Orleans last month.

How much does SkyLink typically sell for?

Typically $999 is the price point. Several lenders have recognized it with an additional $999 advance. For others it could be $750.

That means the price of the product isn't factored in when the lender figures out the loan-to-value ratio, right?

Exactly. All lenders recognize it and approve the product. The way it works is, say, the customer can finance no more than $25,000. With this approval, they can finance $25,000 plus $999.

I've heard that lenders like GPS-equipped cars because it makes it easy to check and make sure the inventory is all there.

Using it as a vehicle inventory management system has gained it a lot of traction as an F&I product.

How is that?

Dealers are telling us they put the device in all their vehicles and they use it as a VIMS [vehicle inventory management system]. You can set geo-fences, even on the lot. The car will send a text if it leaves the designated area. It also sends a low-car-battery alert.

There's a "Find It" app that allows a dealership salesman to enter the last six numbers in the VIN, and it tells them where the car is down to the right parking spot. It's also great for floorplan audits.

So the dealer preloads it? What happens if the customer doesn't want it?

Some dealers preload it. If the customer doesn't purchase it, you remove it and install it on the next car. We've had dealers preload it and get discounts on their floorplan insurance.

You used to have a relationship with Ford, are you pursuing more automaker relationships?

We are not involved with any other OEMs.

Do you expect the Consumer Financial Protection Bureau to start going after F&I products?

I think they will be taking a closer look at products. Some products offer more value to the customer. The proactive dealers will eliminate the products that don't, without being told.

You can reach Jim Henry at autonews@crain.com.

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