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By Deal Pack - June 27, 2012
A starter interrupt device would probably be best defined as technology designed to protect collateral. It’s also recognized as a payment collection system most commonly used by Buy Here Pay Here automobile dealers and sub-prime lenders.
The success of a Buy Here Pay Here dealer is primarily based on how much money can be collected from a customer before they stop paying. A starter interrupt device aids in this process by modifying customers payment behavior. This in turn improves the dealer’s receivables and profitability by providing a more consistent cash flow. Collection activity is decreased and delinquencies are reduced. The consumer also benefits from the device. Customers with impaired credit will now perform in a manner which results in improved credit ratings. The devices assist the customer with keeping track of their payment schedule by sending reminders – some with audio alerts and others with visual alerts.
The device typically consists of two components – hardware that’s mounted under the vehicle’s dashboard and a remote. It’s imperative that the device is installed pursuant to the manufacturer’s specifications to ensure proper working order. Code based and wireless applications are available. Some devices now include GPS which provides another layer of security for the dealer and reduces repossession costs. It’s recommended to provide a disclosure form to the customer indicating the device is installed on the vehicle, its exact purpose and emergency procedures.
Once a customer makes their payment, the dealer accesses the starter interrupt vendor’s software (web application) and updates the customer’s file. A unique code is generated specific to that device which is given to the customer for entry into the remote. This resets the device to coordinate with the payment due date activating the vehicle for another payment period. Advanced Dealer Management Software (DMS) solutions provide integration with the device’s software to automatically update the customer’s file to produce the code.
The customer risks having the vehicle disabled if payments are not made in a timely manner and proper arrangements are not communicated with the dealer. This process simply prohibits the vehicle from starting, thereby disabling ignition. Vehicles in motion are not disrupted. Most devices allow the dealer to program warning days – which are the number of days the device will alert the customer before disabling the vehicle. The dealer also has the ability to provide a customer an emergency code after the vehicle has been disabled. This typically allows use of the vehicle for an additional 24 hours, ensuring the customer will not be stranded.
There are several starter interrupt vendors in the market today providing a wide assortment of options, so it’s important to do your homework before making a final purchasing decision. Also, check with your DMS provider prior to purchasing a device; integration with your Dealer Management Software helps you utilize the device’s features in an easy manner.
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Advanced Business Computers of America (ABCoA) develops and supports end-to-end software solutions for the subprime finance industry. Since 1983,
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