With the current economy and the industry-wide spike in repossessions, many dealers and lenders have looked to Global Positioning Systems (GPS) and starter-interrupt devices to help them manage their portfolio risk. These devices are far from being a panacea—and far from a collections solution “in a box.” But this technology, however, taken in tandem with a proven servicing and collection strategy can help dealers and lenders manage risk and improve the overall return on their portfolios.
GPS allows vehicles to be located online at any time, simplifying collateral recovery, while starter-interrupt allows lenders to disable vehicles in the event of customer delinquency. GPS signals can be transmitted and tracked via various protocols and hardware; different devices have different ranges of reception and networks. Explore which one works best for you based on your geography and other preferences. Lenders and owners will find that while these devices will supplement their operations, GPS tracking offers no help with actually collecting money. The starter-interrupt feature can be helpful in curing delinquent accounts, but good servicing and collections should start way before the point of disabling vehicles.
Subprime auto businesses grew and flourished long before the advent of GPS/starter-interrupt technologies. This technology, however, can help mitigate delinquency and default risk when it supplements world-class collections operations. At end of the day, these units will help you protect your down-side but they will not supplant the need to do the things that build and retain satisfied customers, referrals, and repeat business!