Miss a Payment? Good Luck Moving That Car

http://dealbook.nytimes.com/2014/09/24/miss-a-payment-good-luck-moving-that-car

by spking • 12 years ago

60 80 12 years ago

dealbook.nytimes.com

Ok, ignoring the moral repugnancy of the whole thing for a moment.

T. Candice Smith, who testified before the Nevada Legislature that her car, which had a starter interrupt device installed, was shut down while she was driving on a Las Vegas freeway, nearly causing her to crash
Others said their cars were shut down while idling at stoplights.

How the hell is that legal?! Surely you should only be able to disable a car when the engine is not running just on safety principles.

themartorana3• 12 years ago

It is likely untrue, but anecdotal. That said, how are subprime loans still legal??

crsmithdev• 12 years ago

They'll remain legal as long as they're at all profitable and that profit exceeds any fines or losses in lawsuits.

dogecoinbase3• 12 years ago

It is likely untrue...

Why do you believe this?

joshAg2• 12 years ago

I assume you're talking about the subprime home mortgage debacle? Because the issue wasn't that the loans were subprime, so much as it was the massive amounts of institutional fraud across many layers of the mortgage business that enabled unqualified people to get loans (or loans larger than they qualified for). IOW, subprime loans were the murder weapon, not the murderer.

EDIT: BTW, a subprime loan is just a loan that comes with terms that aren't as good as they could be due to the applicant having some sort of issue in their application (eg, no credit history, a bankruptcy, lots of missed payments, no collateral, lots of other debt, etc.).

nkozyra• 12 years ago

Why would a subprime loan be illegal? The price meets the risk of the loan. It's a wholly logical agreement that provides potential benefit for both parties.

Lazare3• 12 years ago

Of course it's not legal. However, the article also quotes the "other side" claiming that it's impossible for the device to do that, and the manufacturer claiming that the device has is not designed to do that, and that they have no record of it doing such a thing. And on their website they say the device "can never shut down a running vehicle."

So...presumably either Smith is mistaken and/or lying, or the device is defective. It's possible that her car broke down on the freeway, and she assumed it was the starter interrupt when in fact it was not. But it's exceedingly unlikely that the device did so while operating according to design.

(Or Passtime is about to get one humongous fine and/or judgement...)

declan• 12 years ago

Any company that did this would be risking crippling judgements. And it doesn't look like the technology (starter disabling) permits it.

Cars die. I once had an old car, a Saab 900 SPG (160 hp!), which completely died when I was going at speed on I-78 in the left lane. Turns out it was the ECU. I managed to coast to the side of the highway without incident.

Most of the cars mentioned in this article are older ones, which would have more mechanical difficulties. Put another way, if you can buy a nice reliable 911 Turbo S to cart your groceries around in, you're probably not doing that with a subprime car loan.

ArkyBeagle• 12 years ago

Passtime really should embrace the full Micheal Barr treatment toothsweet.

dogecoinbase3• 12 years ago

So...presumably either Smith is mistaken and/or lying, or the device is defective.

But the manufacturer, of course, could neither be lying nor could have produced a device that didn't perfectly represent this notional design.

This entire thread is full of people who have no idea how the device actually works or what actually happened jumping to the conclusion that the female poor person is lying or doesn't understand what happened with her own car that she was driving at the time. It is, of course, possible. But it's also classic Hacker News.

Killswitch• 12 years ago

I used to work at a company that sold devices for exactly what this article is about. One of the biggest selling features of the device was the fact that they could remotely stop a car from starting. I can't speak for any of the companies competitors but I know the devices we sold were not possible to shut the vehicle off, only disable the starter after it's already been turned off.

ohsnap2• 12 years ago

Highly doubtful the car just shut down (unless she perhaps stalled the car). Article mentions the device is tied to the ignition.

joshAg2• 12 years ago

Can't onstar shut down/disable cars that are reported as stolen, even when they are on and in gear and moving?

lifeformed• 12 years ago

It should give a warning before shutting down, and then only shut down overnight, when nobody is driving it, to ensure people are at least back at home or at a reasonable place. There's no reason why it needs to be able to shut down at a moment's notice.

arjie• 12 years ago

My hypothesis is that the device cuts out the starter motor. So if this sequence of events occurs, you can be stranded at a stop light:

1. Start the car.

2. Once the car is started, the order to cut off the starter comes in.

3. You drive.

4. The car stalls for whatever reason.

5. You can no longer start it.

bunderbunder3• 12 years ago

It might be even easier than that. A lot of newer cars have a gas-saving feature where they automatically stop the engine when the car's stopped at a red light, and automatically start it again when you take your foot off the gas pedal. If you've got a car like that, then every traffic signal could be an opportunity for your car to be disabled.

pacaro2• 12 years ago

The woman who needed a pickup to deliver pizza is symptomatic of a different problem too. In many places it would always be the responsibility of the pizza joint to provide the vehicle because typical consumer auto insurance expressly forbids commercial use. The pizza chains not only pay minimum wage, they also expect their employees to provide the business equipment...

ilaksh2• 12 years ago

The thing many people aren't getting is that this type of thing isn't limited to one instance and isn't just that business owners are greedy.

Its because the entire economy is being squeezed, turning a profit is extremely difficult, and there are many unemployed people who have to put up with those types of situations because they need money.

maratd• 12 years ago

If we skip the moral indignation and look at the situation plainly, this sort of technology enables a whole subset of people to actually own cars that were considered too risky before. That's a good thing. Given the choice between no car and a car that won't start if I don't pay, I'll go with a gimped car.

pacaro2• 12 years ago

Yeah, if they wanted to be evil, they'd do deals with the gas companies and the further behind your payment is the worse your gas mileage

Havvy• 12 years ago

That'd be illegal under US gov't. regulations.

pandler• 12 years ago

I love it. "You can't afford to make payments, so we will make you less able to make payments."

idlewords• 12 years ago

It also affects a population of buyers who would have been sold an ungimped car before, but will now be sold a gimped car

That's not a good thing.

How the two factors balance out is not obvious.

GigabyteCoin2• 12 years ago

sold a gimped car

You haven't exactly purchased it until all of the payments have been made.

Once it's actually yours, I imagine you're free to remove the tracker.

shkkmo3• 12 years ago

There are upsides, but it sounds like we need some good old-fashioned consumer protection legislation to protect consumers here.

Mandate no location tracking or car shutoff for owners who aren't 30 days past due.

Mandate that there be a 24/7 line for emergency car re-activation that is clearly posted in the car.

Mandate the provision for 1 non-emergency temporary reactivation to avoid stranding people.

The three of those seem like they would go a long way to to assuage people's concerns.

EDIT: changed 'two' to 'three' since I apparently can't count...

golemotron• 12 years ago

There are upsides, but it sounds like we need some good old-fashioned consumer protection legislation to protect consumers here.

That's an idea that people have given up on in the US. The only consumer protection legislation I ever hear about is in the EU.

dperfect• 12 years ago

Sounds like stuff that would easily be solved by the market (of course it would be demanded, and of course it would be provided for the right price) if this becomes common practice. No need for legislation.

EDIT: Downvote away, but let us remember that having/operating a car is not by any means a basic human right that needs to be protected by legislation. On principle, do you think that if you live across the street from a car rental lot, you should automatically have "emergency" access to any car on the lot at any time? We're talking about essentially renting access to a car that may happen to be parked on your own property, and if you haven't paid for access to the car (or for access to emergency use of the car), then you really don't have any more inherent entitlement to its operation than you do to operating a car parked next door.

ruloo2• 12 years ago

I agree with mandates. However, I do not believe that a vehicle lease agreement should be treated like a cell phone contract. It should be treated more like a home loan. I would be concerned if people could sign home loans that the penalty for default is that you can only come inside when its cold.

In an emergency, declaring the emergency to the car could be problematic, especially if its not the usual driver.

acgourley• 12 years ago

The crux of your argument is that "consumers often have no choice but to take whatever deal" and that lack of choice makes this issue important enough for the government to step in. Is that right?

I strongly disagree, because there are options to: * Own a less expensive car * Take transit * Ride a bike * Find a closer job * Find a closer house * Ride share

Now, you can probably craft a specific story where none of those are an option. Let's say a single mother living in section-8 housing with limited job prospects who is already driving a really old car and who found one job 20 miles away in an area with no transit. That's pretty bad, and it represents failures of our system at multiple levels. First I would propose spending government time to address those core issues before burning time on this symptom. Second, all these rules will make the car more expensive; it's a slight tax on the responsible paid by those who might miss payments. Third, this case is rare and it's unclear its worth the cost and unexpected consequence of regulation.

vpeters25• 12 years ago

Here is a plausible case: girl dates cop, he creeps her out so she breaks up with him. Cop harass her at some dark parking lot, she tries to run but can't start her car because cop had the interlock activated on her....

maxerickson• 12 years ago

Why would he abuse his authority in what is likely a traceable way when he could just slash the tires or what not?

lutorm• 12 years ago

Maybe people should buy cheaper cars if they can't get a reasonable loan? I guess it wasn't clear from the article if these were loans for new or used cars, though.

jimmaswell4• 12 years ago

Yeah, you shouldn't need a loan for a decent used one.

sk5t5• 12 years ago

Shouldn't, but might anyway... a lot of folks don't have HN-type dough on hand, and the vehicles in the article were 2005 and 2001 vintage.

ilaksh2• 12 years ago

A "decent" used car will cost several thousand dollars. The number of people who can easily part with $5,000 is much smaller than you think it is.

bunderbunder3• 12 years ago

Y'know, it's kind of amazing what's happened to the used car market in the past few years. A few years ago when I was shopping for cars, truly awful vehicles that I would have considered to be prime candidates for cubing were being sold for far more than they were worth. I'm not sure what it is, but my best guess is that the Cash for Clunkers program sucked a lot of supply out of the market.

djeikyb2• 12 years ago

What do you feel is reasonable to pay for a decent used car? What do you feel is a normal amount of money to have just laying around, ready to be invested in a car?

My experience looking for a used car in the greater phoenix area says you can't find anything decent for under $10k. Carmax is said to have higher quality used vehicles, but they rarely have anything under $10k (after gov't fees and taxes). Also, in this price range, the mileage is usually 100k+. Nobody keeps maintenance records, so to avoid blowing up your engine, you'll need to immediately spend $500-900 on a new timing belt. Next, expect your high mileage car to have at least one critical part wear out every other month or so.

I searched long and hard and settled on a $6k car. Twelve years old, 150k miles. It was the cheapest car I could find that didn't have any obvious problems (Firestone vetted it; turned out to have $3k+ of problems over the next fifteen months). My income was ~45k. What with all the other bills, I needed a loan.

It's uncommon for a programmer, but the gov't census for the area says a combined income of $40-60k is normal. I know my fair share of single mothers who wait tables for a lot less than half of that.

I heartily dispute the assertion that it's easy to just pay cash for a working car. One last piece of anecdotal evidence to my argument: the ease of selling my high mileage piece of shit car. I put it on craigslist for $1200 and it sold within hours. I described it as clearly as I could: "as is. doesn't work. died and won't turn back on. lots of recent expensive repairs. must tow.".

tl;dr, in my experience, an easy sum to save gets you a car that doesn't run. if you want a car, you need a loan.

sk5t5• 12 years ago

On a technical note, a "starter interrupt" could not reasonably affect a running vehicle (the starter motor only runs when turning over a stopped engine). However, if these devices actually operate inline with the ignition system--delivering or interrupting spark to the fuel-air mixture during operation--that's an entirely different matter and cause for safety concerns.

jedanbik• 12 years ago

I wish it wouldn't sound out of touch and pretentious to suggest bicycle use as a form of resistance, I really do.

dblotsky• 12 years ago

For those more familiar with cars, a question: when the article mentions disabling the ignition, does that mean that only the starter is disabled, or that the actual spark plugs / fuel delivery are disabled (and there is some check for whether the engine is running)? The former sounds reasonable, but the latter sounds like a disaster waiting to happen.

jccooper• 12 years ago

I doubt the article is being precise, first, and might use one for the other. That said: ignition means the electrical system that fires the spark plugs. Starter is the motor that starts the mechanical bits moving, so the ignition can do its job and keep the mechanical bits moving. Any car with the traditional keyed start even shows these circuits as separate positions on the cylinder. Most motorcycles have separate controls for those two circuits: a toggle switch for ignition, and a momentary switch for starter--you must set ignition to "on" before the starter will do any good.

Disable the ignition system, and nothing's going anywhere. Disable the starter motor, and it's just not going to start--unless you push it down a hill or, say, short the relay with a screwdriver (as mentioned in the article).

While technically you could put a remote controlled relay anywhere (the dome light won't light up if you're late on payments--take that!) it sounds from the description of the device ("starter interrupt") and other clues that it's the starter system that's being killed. And that makes a lot of sense: that way if the device fails it at least won't bother you while you're in motion.

thenmar• 12 years ago

It's hard to break this down because there are so many different problems going on here, but let's pretend for a minute that the moral issues related to privacy and dignity are irrelevant, and that the arbitrary credit score threshold of 640 that necessitates this system is reasonable and determined by transparent and fair processes (it's not, but stay with me).

Does this _actually_ solve a problem? Are cars that difficult to repossess? Is it possible this is a marketing gimmick and the securities backed by it are sold to investors who just really like the idea of being able to f*ck over a poor person the second he or she misses a payment? Is this really an economic innovation that lets riskier borrowers have cars, or is it a sales tactic appealing to veiled social darwinist sympathies?

hackuser• 12 years ago

It shines light on a troubling broader issue: As information and communication technologies (in which many of us are involved) spread, they put power in the hands of those who control them, from Google to Verizon to your electric company (via your smart meter) to car loan agencies. It gives them power over other people, including whether they can drive their own car.

Not everyone wants to give others this power, but do we and will we have a choice? Perhaps legislators will pass laws protecting the interests of people like those reading HN, or vendors will appease us because of our economic and political power.

It is the poor, powerless, and disenfranchised who will be abused, with little recourse (other than not owning a car, a phone, etc.). If something like what the article described happened to HN readers, there would be an uproar. But these things will and probably already do happen off our radar to marginalized groups.

Perhaps that's why the Internet protocols put control in the hands of the end users.

discardorama• 12 years ago

Meta: Why is this not on the front page? It has 53 points and was submitted 4 hours ago (and is a technology story to boot). The #5 link on the FP is a story with 26 points and submitted 5 hours ago.

jc123• 12 years ago

A rough idea of a possibility in the future, the car owner can scan a QR code in the car, confirms the transaction, which is recorded on a blockchain, monitored by a smart contract, which activates the car's engine.

furyg3• 12 years ago

This is very shortsighted. Most people in the US use their car to get to work. Lenders have a vested interest in their borrower's current and future ability to earn money.

slouch• 12 years ago

The car dealers that regularly repossess customer vehicles print money. I've seen data come across were the dealer's cost of a vehicle was -2,000 because it had been sold and came back a few times.

rootlocus2• 12 years ago

I do believe they signed a contract before getting the lend saying: "It's OK to block my car if I miss a payment by X days."

Why should they complain? If you don't agree with the terms, don't sign.

_cipher_• 12 years ago

It would be interesting to see what would you do if your child need immediate medical attention and your car won't start because, apparently, "you signed". ;)

Legal != Ethical

rootlocus2• 12 years ago

I would call a cab. It's what people who don't own cars do every day. Ethics has no meaning in this context.

jakebrake• 12 years ago

Does anyone know how widespread and available the ability is to disable vehicles via OnStar? I heard today that a woman in Missouri had her 2005 Dodge disabled (by a lending institution) for allegedly being 1 day overdue on a car payment. Like, does it go on in all parts of north America, and would it be available for just charter banks, or any joe schmoe money lender? Would anyone also know if there are systems other than OnStar, that will allow tracking/disabling of a given vehicle?

Miss a Payment? Good Luck Moving That Car

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