Sekurus, Inc., an asset protection company, created the very first engine shut off device, called On Time. Sekurus also manufactures Global Positioning Systems (GPS), anti-theft systems, and other technologies for the automotive sub-prime market. According to Sekurus, the On Time device is a legal electronic payment protection unit that uses microprocessor-based technology to turn credit challenged prospects into paying customers who pay in a timely manner. The device reminds the driver when payments are due. The first reminder occurs at three days before the payment is due, then at two days, and then one day before the payment is due. If the payment is not made on the due date, the device will disable the vehicle.
Engine shut-off devices have been criticized for being unsafe because drivers feel that the device may disable their vehicle while the car is in use or during an emergency. According to the manufactures of On Time, the device will not disable the car while driving. Once the car is turned off, it wont restart. In the case of emergencies, codes are available that will restart the car -- temporarily.
Statistics seem to support Sekurus claims that the device turns credit-challenged prospects into paying customers. CNW Marketing & Research in Brandon, Oregon has reported that only 3% of sub-prime vehicle owners with the On Time device fail to pay their car payment on time, while 27% without the device fail to pay their car payment on time. Only 3% of sub-prime vehicle owners with the On Time device end up having their cars repossessed, compared to 15% without the device. And while 3% of sub-prime drivers without the device skip town, less than 1% with the device skip town.
Sekurus is not the only manufacturer of engine shut off systems. Several other companies have jumped on the bandwagon and are currently moving several thousand units into the market each month. One manufacturer has reported a 33% increase in sales over the last year as consumers continue to fall from A to B credit at a rate of 300,000 a month. Sales for the original engine shut off device reached 200,000 between 1999-2005. Since then, sales have increased at a rate of 40% a year.
More than 15,000 car dealerships across the nation now use engine shut-off devices and not all are used for individuals with B credit or less. Some dealerships use them for individuals that have no credit at all and individuals that might be receiving pay in cash. In addition, many finance companies and credit unions have made the devices a requirement for financing and some lenders with customers with A credit install the devices just in case. The engine shut off devices for these individuals are left in inactive mode. If the customer defaults, active mode will be enabled.
Engine shut off devices may sound extreme to sub-prime car buyers, but according to manufacturers, car dealerships, and finance companies, there are a number of major benefits to drivers. Car dealerships maintain that the devices allow them to sell cars to individuals that they would otherwise turn away. Finance companies offer lower interest rates to drivers willing to purchase a car with the device, helping these individuals save money. And finally, manufacturers maintain that the devices will help sub-prime buyers develop better paying habits, which will help increase their credit rating.
Michelle Burton is a published author and contributing editor for Auto Insurance Tips, Trouvé Media, Internet Brands, and Publications International, Ltd.