Using Starter Interrupter and GPS Devices on Cars Financed From Buy Here Pay Here Dealerships
Posted on March 9, 2023 by Rick Griffith
Technology has changed how we look and function in our world today. Many industries get impacted by technological advancements, including financial institutions and lienholders.
In today’s blog, we’ll discuss the growing use of Starter Interrupter Devices (SIDs) and Global Positioning Systems (GPSs) by some Buy Here Pay Here (BHPH) dealerships. In addition, we’ll explain what SIDs are and how GPS is part of the process.
Lastly, we’ll give you some vital information on the best practices to remember when buying from a BHPH dealer.
Why Do BHPH Dealerships Use SIDs?
SIDs are a crucial tool lienholders use to protect their investments and ensure payment on auto loans. While not every BHPH dealership uses SIDs, they are an effective tool for safeguarding collateral assets that get financed.
An SID can motivate borrowers to make regular, on-time payments. When behavior modification is applied effectively, lenders experience an increase in repaid loans.
Another benefit of this system is that it reduces collection costs and eliminates the risks associated with delinquent payments. With a GPS device installed, repossession costs are significantly reduced.
The advantages are not one-sided either. Car buyers and BHPH dealers benefit from installing an SID with a GPS component.
- Customers that make on-time payments can repair their damaged credit history.
- BHPH dealers receive on-time payments to obtain the revenue to conduct business.
- Local economies benefit from a stable company offering employment opportunities.
What Is a Starter Interrupter Device, or SID?
An SID is a practical asset security solution with hardware and remote components. The hardware component contains a GPS that allows the BHPH dealership to locate and remotely control the installed SID on the vehicle.
The SID affects the ignition systems of vehicles. It connects to the engine’s circuitry with wires, and the car motor will not start when the switch gets initiated. The signal and electrical current disable the spark plugs from firing correctly, disrupting the combustion that initializes a car to start.
SIDs are commonly used on vehicles whose buyers have less-than-perfect credit. An SID also may be installed as part of a post-repossession reinstatement agreement during the initial financing stage. In other words, to receive financing, car buyers must agree to allow the BHPH dealer to install an SID on the vehicle before driving away.
PIN Activated SIDs
With every payment made, borrowers receive a unique PIN for verification. To ensure payment is received for each payment period, some SIDs deactivate by PIN code before starting the engine.
If a payment gets missed, the old code is disabled, and the borrower will not receive a new code until they make a payment.
- The first code is issued after the customer acknowledges the SID agreement.
- A customer receives regular payment reminders to avoid missing a car payment.
- BHPH dealerships update the payment records using an online application for the SID.
- A borrower gets a new PIN generated to keep the SID system disabled and start the engine.
- The device resets to coordinate with the payment due date.
Best Practices for Using SIDs
A properly installed SID ensures a car won’t shut down while being driven for safety reasons. The BHPH dealership should also provide you with an emergency backup, like an 800-number to call or a code to enter if you must drive the car in the case of an emergency.
As a car buyer, you should expect a BHPH dealer to disclose the installation and use of an SID or GPS component. BHPH dealers that use these devices should fully explain how the process works and what your responsibility is as a borrower.
In some states, not informing buyers about an SID is illegal; in others, there may be better practices. For this reason, it’s always best to let buyers know of any installation of an SID with a GPS.
Car Credit, Working to Get You Back on Financial Track
If you’re buying a car from a BHPH dealership because your credit history or payment record is less than favorable, then be sure to ask if they use SIDs with a GPS before taking possession. But if the SID with GPS component is unappealing, keep looking for a BHPH dealership with a solution that works best for you, such as the team at Car Credit.
They understand that no one should feel shamed by financial challenges. But unfortunately, these past few years have hit many Americans’ finances hard, and there’s no team working harder to safeguard your financial privacy.
The team at Car Credit also safeguards every car they sell. With a rigorous reconditioning program for every vehicle because your and your family’s safety is of great importance to the Car Credit team.
A car must pass Car Credit’s quality standards of safety and reliability before sale. Vehicles that don’t pass their quality standards get sold wholesale.
That’s the kind of service you should expect from any dealership. To get started, look at Car Credit’s current inventory of cars, SUVs, and trucks, then complete their online credit application! After all, you and your family are worth it to the team at Car Credit.