Late payment? A ‘kill switch’ can strand you
About a decade ago, when Erin Hayes was in her late teens, she bought a used car with a subprime loan from one of those “buy here, pay here” car lots close to her home near Raleigh, North Carolina.
One day in 2013, having forgotten to make her payment, she got into her 2006 Kia Optima at work and turned the key, but instead of starting so she could go home, the car made a loud beeping noise and wouldn’t go anywhere.
The lender, without her knowledge, had installed a “kill switch” and triggered it remotely after Hayes missed a payment.
“I was very anxious,” Hayes said recently, recalling being stranded with her first car. “They cut the car off, and I was 20 minutes from home. I told them I would try to pay them, and they cut it on for an hour. If I didn’t have the payment to them in an hour, they’d cut it off again.”
A couple of years later, the same thing happened with her next car, a 2008 Hyundai.
Rudimentary kill switches have long been sold to the public as anti-theft devices for less than $50 apiece. But many subprime auto lenders across the country are using more sophisticated versions to ensure that car buyers make their payments.
Hayes, now 27, acknowledges her credit wasn’t very good back then; that’ s why she had the high-interest loans and the kill switches in the first place. But she says having a kill switch on her cars led to her being stranded more than once.
At least her cars didn’t stop in the middle of a trip. That’s what happened to T. Candice Smith from Las Vegas. Smith in 2013 testified to the Nevada legislature that her car’s kill switch activated as she was driving down Interstate 15.
“All of a sudden the steering wheel locked up and the car shut off,” she testified. “I was barely able to make it to the left shoulder. I was scared and shaking and had no idea what just happened.”
Lenders and switch makers contend that the switches are less embarrassing than the traditional “repo man” showing up on a car owner’s doorstep to take the car. They argue that the switches make getting the car operational again faster and easier than going to an impound lot.
“They do serve a purpose, and there are benefits to them,” said Michael R. Guerrero, consumer finance attorney at Ballard Spahr, a California law firm that specializes in advising companies on how to comply with consumer law, in an interview. “They reduce repossession costs, and they permit the consumer to cure the default and restart the vehicle when it’s cured. They also give some consumers access to credit who otherwise might not qualify.”
Jeff Karg, director of marketing and communications for PassTime in Colorado, said that the automobile starter interrupt devices – as kill switches are also known – that his company manufactures can help consumers avoid repossessions by buying time to negotiate a payment plan with the lender.
His company conforms to state laws, he said.
“We do have best practices in terms of how we think that the industry should operate with the consumer in mind and being respectful and taking proactive action to keep the consumer in the vehicle.”
But only half a dozen states have enacted regulations on kill switches, including California, Colorado, Connecticut, Nevada and New Jersey. The laws vary, but all, at the least, require telling the borrower that the devices, which also have GPS tracking, are installed.
The Colorado law specifically prohibits stopping the vehicle if doing so would pose a danger to its occupants, such as when it’s in motion. Most of the other laws call for 24 or 48 hours’ notice before the vehicle is disabled, and many allow grace periods or emergency overrides.
Sophia Romero, staff attorney in the Consumer Rights Project at the Legal Aid Center of Southern Nevada, said it took years and a series of lawsuits for the law in her state to catch up with the practice of installing the devices on cars.
One of the unnoticed problems, she said, was that many of her clients’ pay schedules were not coordinated with their car payment schedule, leaving them with little money at the end of the pay period to make the car payment.
“Their cars were off most of the time,” she said. “Obviously it hurts the consumer because these people can’t get to work.”
North Carolina, where Hayes lives, does not have a specific kill-switch law. However, under the state’s repossession law, a lender is permitted to render a car inoperative if payments are missed, according to Laura Brewer, spokeswoman for the North Carolina Department of Justice.
Separately, the Federal Trade Commission is looking into whether installing the devices on cars violates consumers’ privacy, as was reported last year in Bloomberg and other news outlets. The FTC, citing a policy not to comment on open cases, would not confirm the inquiry when asked about it in November.
The Electronic Privacy Information Center, a privacy rights group based in Washington, D.C., also filed a complaint last year with the Consumer Financial Protection Bureau, asking the agency to look into the devices as invasions of privacy. continued from E1 ing wheels as a generator when you slow down) cuts down on your use of your brake pads. So if you’re looking for a lower-maintenance car, and you can make do with a couple of hundred miles of range before recharging, an EV is for you.
For good, basic transportation, we like the Chevy Bolt, the Nissan Leaf, the Hyundai Kona and the Kia Niro. All four should get you more than 200 miles on a charge. As an added benefit, you’ll be able to “refuel” your car in your own driveway. So you’ll never have to visit a gas station again … unless you have a sudden urge to buy a pack of gum or use a filthy restroom.
Old cars learn new tricks when leaded gas was phased out
Dear Car Talk:
I bought a 1969 Chevrolet Chevelle SS 396 recently and want to know if unleaded gas will harm my engine. Also, will using regular unleaded instead of high-octane unleaded hurt? I’d rather use the less-expensive regular, but not sure what to do here.
– Jim
RAY: You have no choice, Jim. You have to use unleaded gas. Will it harm your engine? Mostly no. When lead – a known carcinogen – was finally phased out of gasoline in the 1970s, older cars like yours did fine, except for one thing. It turns out the lead in the gasoline provided a cushion between the valves and the valve seats. And without lead, the valve seats suffered from something called “valve seat recession.” Basically, they got pounded.
When those valve seats got pounded to the point that they wore out, they had to be replaced with hardened valve seats. That’s the only kind you can get now. And they’ve stood up well over time with unleaded gasoline. So if your Chevelle has already had its valve seats replaced (which is pretty likely, unless it’s got very low mileage), you already have hardened seats and there’s nothing to worry about. If your valve seats haven’t been replaced yet, when they do wear out, you’ll replace them with hardened seats, and then there’ll be nothing to worry about. Either way, there’s nothing you can do, so just drive the car and enjoy it.
In terms of the octane rating, your only goal is to prevent pinging. So experiment.
First, make sure the valve timing is set correctly. Then try the lowest octane fuel, and when you accelerate up a hill, see if you can hear the engine pinging. If you can, try the next octane level up from there. Do that until the pinging goes away.
Pinging, also known as pre-ignition, is when some of the fuel combusts in the cylinder when it’s not supposed to.
That’ll eventually burn holes in your pistons, which will cost much more to replace than those valve seats. So use unleaded fuel with an octane rating that’s high enough to prevent the car from pinging, pick up a pair of striped bell bottoms, and you’ll be good to go in the Chevelle, Jim. Enjoy. Got a question about cars? Write to Car Talk write to Ray in care of King Features, 628 Virginia Drive, Orlando, FL 32803, or email by visiting the Car Talk website at www. cartalk.com.