Black Box Car Finance Reviews
But what about those people at the other end of spectrum, who are likely to only qualify for sub-prime loans? Those with shaky credit history often don't get much of a look in when it comes to the best deals on car finance. Until now perhaps, with the revolution of black box car finance technology. This technology has been operating in the US for several years, but it's only recently been introduced in the UK.
What is black box technology in relation to cars?
Black box techology for cars has been around for a while now thanks to car insurance companies, who use it as a GPS to track and monitor driver performance. The aim here is to offer better, more personalised, insurance premiums to younger drivers who are also careful drivers. So that not all young drivers are tarred with the same brush so to speak.
Now though, the "payment box" has emerged as a way of ensuring that car finance customers (those with bad credit) don't miss repayments. It's being billed as a revolutionary approach to mitigate the risks of customers getting into car finance debt and because car finance companies should be able to widen their scope for customers, this should increase their overall profit too.
How does the payment box work?
The payment box is a small device that is fitted to a financed car with the customer's permission. When the car finance payment is due, the device starts to flash to alert the customer that they need to make a payment. If the customer is several days late with payment, the device is activated remotely and the vehicle will stop working until any outstanding arrears have been paid.
The system ensures that the vehicle is disabled only when not in motion, so there's no risk of any accidents. Once the customer's payments are up to date, they are sent a numerical code from the car finance company which they input into the device. At that point, the vehicle starts working again!
The payment box does also work like a GPS, so vehicles can be located and recovered should they need to be repossessed.
Is the payment box a good idea?
I personally think that the payment box idea has a lot of good points. In theory, it should allow people with bad credit to get a fair deal on car finance – and a fair deal is something that they'll likely need in order to get back in control of their finances again.
Let's face it – people who can't afford to take out car finance shouldn't be doing this in the first place. But, the truth of the matter is that people still do and maybe missing a car payment or two is something that they're not all that worried about. However, if they knew that their car would just stop working should they miss a repayment, perhaps taking out car finance would be more carefully considered from the outset?
When money is tight, it makes financial sense to pay priority bills first, such as the mortgage or rent and utilities (after all, you can get your electricity supply cut off pretty quickly should you fail to pay). The payment box technology could effectively move car finance bills up the priority list of which bills need to be paid first – this is a good thing, only as long as a choice doesn't have to be made between paying car finance or electricity for example. That would be BAD.
I checked out some interesting research done by Stoneacre, a car finance company here in the UK. They asked 500 car buyers what they thought of the payment box idea and 35% of people asked thought it was a good idea. 34% thought the payment box would be an invasion of privacy and 31% didn't care either way.
When it comes to privacy, the customer would be aware of the device being fitted before they buy a car, as they would have to acknowledge this and sign it off within the agreement. I guess the issue of privacy comes into effect if the device is being used as a tracker to locate the vehicle.
One slightly worrying thought that I have about the payment box is that there are some lenders out there who may take advantage of customers who they know can't afford the repayments. Because at the end of the day, they will be able to track the car easily enough and repossess it anyway if payments aren't made.
What do you think about black box technology for cars?
- Blue car photo credit: IMG_1358 WRX STI 2016 via photopin (license)
- Red car photo from Pixabay (Creative Commons)
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Source: https://diseasecalleddebt.com/black-box-car-finance/
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