Bad credit can happen to good people. And when those people want to buy cars and trucks, Eric Stewart has a solution.
Stewart, general manager of Shasta Nissan-Subaru in Redding, Calif., said he steers customers with credit problems to used vehicles with a starter-interrupt system.
The electronic system prevents a vehicle from starting if the owner has missed a payment. Many dealers and lenders say they won't finance some customers with sketchy credit unless they agree to install the device.
"It alerts them when a payment is due," Stewart told Automotive News. "After a five-day grace period, it shuts the vehicle off."
The system that Stewart's dealership uses, "On Time," is smaller than a deck of cards and fits underneath the instrument panel.
Sekurus Inc., which makes On Time, says dealers who use the device cut their repossession rate for used cars and trucks bought with subprime loans to about 3 percent. For comparable vehicles that lack starter-interrupt systems, Sekurus says, as many as 25 percent are repossessed.
Sekurus CEO Don Lavoie says his Southern California company has about 1,000 dealership clients, about half of them franchised. Other big suppliers of the systems are PassTime USA, of suburban Denver, and Pay Technologies LLC in Cleveland.