Lenders Can Shut Off Car Ignitions for Late Loan Payments

rollover accident on a highwayBy installing a starter interrupt device in a car, lenders can shut off car ignitions for borrowers with late auto loan payments. In Nevada, this has led to personal and class action lawsuits that require legal help from an auto accident attorney Las Vegas.

What is a Starter Interrupt Device?

For auto buyers with good credit, getting a car loan is a simple matter of filling out necessary paperwork for approval, but a buyer with bad credit is often turned down or given a high loan rate that makes the loan unaffordable. By installing a starter interrupt device that allows the lender to disable the vehicle for late payments, the buyer may be approved for a loan.

A starter interrupt device is connected to a GPS unit. It’s installed by the dealer, but controlled by the lender. If activated, this device can prevent the car from starting or moving. The installation of the unit often helps the buyer to get a lower down payment, a lower interest rate, and lower monthly payments because the lender considers the loan to be a lower risk for default. Although the device is controversial among consumers and many auto safety groups, it’s being installed by dealers across the country. Some dealers, including ones in Nevada, state that they install starter interrupt devices in 90 percent of the cars they sell.

Risks of Accidents and Injuries

One Las Vegas resident states that her car was disabled by the lender because her payment was three days late, and she could not take her ill son to the hospital. Another claims that her car was disabled while driving on a Nevada freeway.

In addition to disabling a vehicle, a starter interrupt device also has tracking capabilities that allow lenders and others to track a borrower’s movements, a major concern for privacy advocates. In addition, devices emit beeping sounds that become more persistent as the loan payment due date approaches. Not only is this a nuisance, but it creates a dangerous distraction for drivers and increases the possibility of accident and injury claims.