The Intersection of GPS Tracking and BHPH Dealerships

By Evan Akins - September 8, 2023

Deal Pack seamlessly integrates with many popular GPS companies. GPS tracking provides many advantages from asset management to customer safety, however, there are some ethical and legal limitations on how GPS’s can be used at your dealership. To avoid any state-to-state differences, this blog will describe federal laws. Disclaimer: This writing is not intended to be legal advice. Contact your attorney or local IADA chapter for up to date information about state and federal regulations.

The Advantages of GPS Tracking in BHPH Vehicles

GPS tracking technology allows BHPH dealerships to remotely monitor the location and movement of their vehicles. This has led to a variety of benefits for both dealers and customers


Enhanced Asset Management: For dealerships, GPS tracking provides an effective means of managing their vehicle inventory. This technology helps dealers keep track of vehicle locations, which can be crucial for inventory management, service scheduling, and repossessions if necessary.

Risk Mitigation: BHPH dealerships often work with borrowers who have less-than-perfect credit histories. GPS tracking can help mitigate the risk of non-payment by allowing dealerships to locate and recover vehicles in the event of default.

Customer Convenience: Some GPS tracking systems offer additional features such as remote vehicle diagnostics, enabling customers to receive real-time updates about their vehicle’s health and performance.

Safety: In the event of an accident or emergency, GPS tracking can help emergency services quickly locate the vehicle, potentially saving lives.

Ethical Considerations: Striking the Right Balance

While the benefits of GPS tracking technology are clear, there are ethical considerations that cannot be overlooked:

Privacy Concerns: GPS tracking raises concerns about the privacy of the vehicle’s occupants. Monitoring someone’s location at all times could be perceived as an invasion of privacy, even if the intention is to protect the lender’s investment.

Transparency: BHPH dealerships must be transparent with their customers about the presence of GPS tracking devices in the vehicles they sell. Clear communication and informed consent are crucial to maintaining trust.

Data Security: With the collection of location and vehicle data, there’s an increased risk of data breaches. Dealerships must invest in robust cybersecurity measures to protect sensitive information from falling into the wrong hands.

Usage Policies: Dealerships should establish clear policies regarding the circumstances under which GPS tracking data will be accessed and used. This can help prevent abuse of the technology and ensure that it’s used solely for legitimate purposes.

Legal Considerations: Stay Compliant

TILA and Reg Z: Regulation Z of the Truth in Lending Act (TILA) requires an accurate disclosure of finance charges. If a dealer adds the cost or installment fee of a GPS to a retail installment contract, it may be considered finance charges and a violation of Regulation Z.

UDAP: Unfair, Deceptive, or Abusive Acts or Practices (UDAP) regulatory guidance says that adding the installation cost of a GPS is the same as adding the cost of the GPS device itself.

Data Protection: Implement stringent data protection measures to safeguard the GPS tracking data from unauthorized access or breaches. Compliance with relevant data protection laws is essential.

Education: Educate yourself and your employees on federal and state regulations by talking to your attorney or local IADA chapter representative.


Finding the Middle Ground

GPS tracking devices have undoubtedly brought a new dimension to the BHPH industry, offering valuable tools for managing risk and enhancing customer experience. However, ethical and legal considerations must be at the forefront of the decision to implement this technology. Striking the right balance between technological innovation, federal and state laws, and ethical responsibility is the key to ensuring a fair and mutually beneficial relationship between BHPH dealerships and their customers.

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