With less than perfect credit, Kathy Cryster was told there was only way she could qualify for a car loan if she bought a car equipped with a high-tech gadget that disables the vehicle if she misses a payment.
She needed a car to get to work but was worried about being at the mercy of an electronic device that might cause her to be stranded if she ran short on cash.
"Public transportation was not an option," said Cryster, 51, of East McKeesport, Pa.
Three and a half years later, she realizes those early fears were unfounded. She's never missed a payment on her 2000 Chevy Malibu and that has played a big role in helping rebuild her credit rating.
Car dealers across the country are using an innovative new car payment technology called On Time, which ensures that customers who have credit problems will make prompt payments, because if they don't pay they don't drive.
Developed by Sekurus Inc., a company based out of Murrieta, Calif., On Time is a small computer that fits beneath a car's dashboard. It begins flashing the day a payment is due. Two days later, it also starts beeping to warn drivers their car will be disabled within 24 hours. If a payment is not made, the device signals a chip in the car's starter, preventing it from turning over when an owner turns the key.
"As long as they make their payments there's absolutely no issues. If they don't, the device takes charge," said Jim Shorkey, owner of Courtesy Jeep Suzuki in North Huntingdon, Pa., the dealership where Cryster bought her car.
Shorkey said he has been using the On Time system for about six years. Car repossessions and delinquent payments have decreased during that time and he has been able to help more people with poor credit buy vehicles.
He sells about 70 cars a year outfitted with the device. Most of those cars are used, but he has sold some new cars with the On Time system as well.
"It works very well," Shorkey said. "We have had some people graduate to not needing this device. The sole purpose is to get people to pay on time."
Customers with the On Time device usually have to pay a higher interest rate on car loans. Sean Rattigan, finance manager at Courtesy Jeep Suzuki, said their interest rate averages around 18 percent, whereas customers with the best credit pay around 6 or 7 percent.
Rattigan said the devices are programmed for the total loan payoff and cannot be removed until the car loan is satisfied in full. Each unit costs dealers about $200.
Cryster pays $85 a week on her car loan. After she makes her payments each Friday, the dealership gives her a numeric code to punch into the device that allows her to drive until the next payment is due.
"It has helped me prioritize," she said. "You realize your car bill is an important thing to make sure you take care of. It did turn out to be a good deal for me."