By on October 4, 2017

Buy Here Pay Here Subprime Financing Extravaganza Circa September 2014

GPS tracking devices are a common sight in cars sold by “Buy Here Pay Here” dealers, and some are even showing up at franchise dealers. A lot of speculation exists about how the devices work and what they can actually track, but most of it comes from third-party reports.

Working as a tracking device installer for a brief period of time gave me an inside view of that market, allowing me to share what actually goes on behind the scenes.

Tracking devices are most often installed by dealers who sell cars to buyers with a low credit score that does not qualify them for a traditional loan. The money for these loans usually comes from the dealers themselves or from subprime financing institutions. Due to the risk factor involved, many of these loans come with a stipulation of having a tracking device installed.

These devices are generally split into two categories: tracking-only devices which can only passively track the car, and starter-interrupt devices (SIDs) which can interrupt the starter and prevent the vehicle from starting. Most vendors sell both or offer the interrupt service as an add-on. These devices generally start under $100, going up slightly as options are added. Along with the purchase price, dealers usually pay a small monthly fee for the service, based either on a flat rate or on the number of lookups performed by the dealer or lender.

Installation of these devices is fairly simple and is usually performed by authorized installers, stereo shops, or dealership employees. The device are composed of a main control unit that requires power and ground and an external GPS antenna routed to provide the best possible reception. The devices are usually hidden away under the dash, preventing owners from finding and disabling them. Most loan agreements include a provision intended to prevent tampering.

imetrik gps tracker

The intrusive installation happens when a starter-interrupt device is installed, as it requires cutting the engine starter wire. In those scenarios, the starter is routed through the control box of the tracker, requiring the tracker to complete the circuit for the starter in order to turn the engine on. Dealers and lenders that use the boxes have the capability to disable a starter — meaning once the signal is sent, the car will not be able to restart after it is shut down. I haven’t seen any devices set up in a manner that could shut down a car while it was driving, though I have seen poor crimping jobs where the wires came apart and the car was not able to start (even though it wasn’t disabled).

Once a starter is disabled, most devices offer some sort of signal — such as a beep — to let the customer know an action has taken place. Some devices are fully remote and can be enabled via an online dashboard. Others have a keypad that requires the customer to enter a code supplied by the dealer or lender once they have paid off their outstanding balance.

Usually, a plethora of software analyzes the tracking data. In the most basic packages, dealers can ping a car at any time to see where it is located, and can set a geofence alerting them if a car leaves a certain geographical area. Many packages also offer more advanced features such as tracking the vehicle’s most commonly visited locations. These services are advertised as allowing easier repossession even if a device is disabled, as the driver is likely to visit those locations again.

Most of the dealers I worked with had these devices on a “set it and forget it” strategy — they would install them and only check them when a customer fell behind on their payments. Most of them also offered a free removal service once the loan was satisfied, as they did not want to be tracking paid-off cars and could reuse the devices in many cases. The trouble usually comes from dealers that abuse these devices and disable them prior to an agreed-upon date, either to try and get customers to pay faster, or to try and extract more money in order to remove devices once a car is paid off.

Following some high-profile leaks, concerns have arisen over the devices’ data storage levels. One leak resulted in over half a million password being leaked from the SVR Tracking database. Since most of these companies interface with car dealers and store data on car buyers, you can see how data security might not be high on the list. A few states have started regulating the devices. However, because they are so new, laws differ widely from state and very few standards exist for them.

As these devices are becoming cheaper and more widely used, hopefully some consumer protections will follow.

Get the latest TTAC e-Newsletter!

Recommended

48 Comments on “How ‘Buy Here Pay Here’ GPS Tracking Devices Work...”


  • avatar
    Heino

    Consumer protection is never for the poors.

    • 0 avatar
      carguy

      This has nothing to do with consumer protection.

      The device is used due to the frequency of defaults by consumers in this demographic. The device is used to protect the property of the financier/dealer – and the have every right to do so.

      • 0 avatar
        arach

        I concur.. since the dealership owns the car and not the consumer, I have a hard time seeing this as a consumer protection concern.

        Now I’m not saying there aren’t many parts of Buy Here Pay Here lots that DO raise questions about consumer protection, but GPS tracking in a dealer-owned car do not fall into one of those

        • 0 avatar
          VoGhost

          Nope. The car is owned by the consumer. It’s not a Lease Here Pay Here lot.

          • 0 avatar
            carguy

            VoGhost:
            In this case the consumer does not hold the title so they don’t really own the car. They are, however, legally responsible for it.

          • 0 avatar
            28-Cars-Later

            @VoGhost

            What carguy says used to be true, but I’m not exactly sure. I would imagine the lienholder is still given the title until the debt is repair.

        • 0 avatar
          Dorri732

          “since the dealership owns the car”

          This isn’t exactly true. If you purchase a car and finance it, you own the car. The dealer (or bank) has a lien against it, but it’s your car.

          • 0 avatar
            DenverMike

            It’s not actually a car loan. More accurately it’s a rental, so figure “rent to own”. Except BHPH customers wouldn’t appreciate it being called that.

        • 0 avatar
          tylermattikow

          There should be strong laws to protect privacy with these things. Ie you shouldn’t be able to get a location until a driver is delinquent and repossession is imminent. Otherwise what’s to prevent a used car dealer from using this technology to stalk a customer?

          • 0 avatar
            DenverMike

            BHPH customers sign away their rights to privacy. It beats walking or riding the bus I’m sure. But BHPHs already know where you live/work and who/where your closest friends and family are.

    • 0 avatar
      stuki

      No protection is for the poors. The Sam Colt variety possibly excepted.

      • 0 avatar
        operagost

        Which is one of the biggest reasons why elites like gun control. It keeps the poor and undesirables in check.

        • 0 avatar
          28-Cars-Later

          Well really everyone, which in the pyramid style society they recently created means nearly all are serfs.

          This is what we have:

          https://i.pinimg.com/736x/71/c7/bc/71c7bc11ae5433b768fc27b06d766fd8–social-class-the-social.jpg

          This is what we sort of used to have:

          http://critiques.us/index.php?title=Diamond_Shaped_Society

          • 0 avatar
            28-Cars-Later

            I apologize here is a better link for the first one:

            http://feudums.com/sites/default/files//d3b88354eec905b2bc81d06a52da4312.jpg

        • 0 avatar
          civicjohn

          You have to be kidding…

          • 0 avatar
            28-Cars-Later

            I’m sorry here is a working link for the first one.

            http://feudums.com/sites/default/files//d3b88354eec905b2bc81d06a52da4312.jpg

        • 0 avatar
          sgtjmack

          What are you rambling on about? There is the exact same protection for all, regardless of their income level. Just because you are bad with your money and spend it on other things he except the bills you incure does not mean there is anything eroniois going on here.

        • 0 avatar
          golden2husky

          ….Which is one of the biggest reasons why elites like gun control. It keeps the poor and undesirables in check…

          Damn, what an ignorant post.

      • 0 avatar
        sgtjmack

        What are you rambling on about? There is the exact same protection for all, regardless of their income level.

    • 0 avatar
      28-Cars-Later

      True, but in reality it is never for any individual. The only time you may see intervention is when a larger scam or impropriety is found, and then the dishonest businessmen simply move the game elsewhere.

  • avatar
    stuki

    If they’re that easy to install, they can’t possibly be that hard to route around. Sounds like just hard completing a cut circuit out in the open. And if you want to be fancy, hook up a short term battery to the tracker, and tape the whole thing to a truck, of friend’s car, that is bound for Mexico or Nicaragua or somewhere else not worth going to, over a cheap car.

    • 0 avatar
      b534202

      Looks like you can just run a wire connecting the ignition to the starter relay and bypass the ‘relay harness’ block. Don’t really need to know where all the GPS electronics are hidden.

      • 0 avatar
        stuki

        That’s what I was thinking as well. And everything sounds like it is out in the open. Not buried inside the engine block or some such.

        If you go through the hassle, you may as well send the GPS unit, and Repo Man, on a bit of an exotic vacation, while you get to enjoy your car for a bit.

  • avatar
    George B

    I did a little work on a vehicle tracker that used a wireless connection between the device and the starter relay. The OEM starter relay is removed and the replacement one is installed without the need to add wiring. The general trend is to make tracker products that hide under the dash and plug in without changes to the vehicle wiring to reduce installation and removal labor. The GPS and cellular radio signals easily pass through a plastic dash so there’s no need for external antennas.

    The business side of these devices using tiny amounts of data on the cellular networks is interesting. Tracking devices transmit short bursts of data and receive almost nothing so they use very little of the network capacity, but phone companies aren’t set up to deal with tiny bills to large numbers of non-human users. There are Mobile Virtual Network Operators that buy cellular capacity and specialize in reselling it for these Internet of Things applications.

    • 0 avatar
      yankinwaoz

      Thank you. I was going to mentioned that this “How it works” completely fails to mention how the controller communicates with the dealership.

      They must have a radio component for this function. Do they use mobile networks? VHF networks? UHF networks

      Perhaps they don’t have any radio at all. Maybe the device turns off every 30 days unless the driver takes it the dealer, makes a payment, and they plug in a terminal to unlock it for another 30 days.

  • avatar
    Superdessucke

    Haha! Like a shopping cart at a ghetto Jewel when you try to run down the alley with it. And people blame Trump for being harsh on the poor. Ouch.

    • 0 avatar
      sgtjmack

      How does this have anything to do with a person’s I come rather than their personal spending habits?

      • 0 avatar
        Superdessucke

        You really need that explained to you? People’s spending habits are related to their level of personal responsibility. And people’s income levels are also related to their level of personal responsibility.

        People who are impulsive tend to make bad choices and as a consequence tend to not be financially successful. They would rather be impulsive then commit and put in the effort and make the sacrifices necessary to establish themselves in a good career.

        I know that’s taboo, and if you’re a liberal, you’re probably gasping on the floor but it’s a true fact. Ask yourself, who did you choose to live around? Then ask yourself why. Ask yourself why you did not choose to live around the poor people that you champion. You might not like the answers but it’s probably a worthwhile exercise.

  • avatar
    rcx141

    Question: Why is it called “buy here pay here”? Where do you buy a car and not pay at the dealership?

    • 0 avatar
      28-Cars-Later

      I think is meant as a simple concept for a wide range of understandings, in essence “buy from us, and make payments to us”. I’ve found this no longer to be true as bad loans are being sold to banksters and wrapped into bonds (because the only thing learned from 2008 is switch the asset class while running the same scam).

    • 0 avatar

      28-Cars-Later is right. It used to be that a standard purchase involved paying money to the bank for a loan while a BHPH purchase involved paying the dealer on a weekly/monthly basis but all of that has been thrown out of the window recently.

      • 0 avatar
        28-Cars-Later

        Thanks for professional confirmation.

        Piece on Millennials and Pawnbroking:

        reuters.com/article/us-column-rebell-pawn/why-are-millennials-tapping-payday-loans-and-pawn-shops-idUSKBN0UL0FP20160107

        • 0 avatar
          2manycars

          The answer to the question posed by that article is obvious to anyone who has been around the block a few times: Millenials are imbeciles.

          • 0 avatar
            HotPotato

            Every generation in history: “Kids these days are the worst!”

            Millennials aren’t imbeciles; they’re the smartest generation in history. What they are, is criminally underpaid.

            Back under the bridge with you.

          • 0 avatar
            28-Cars-Later

            “Millennials aren’t imbeciles; they’re the smartest generation in history”

            Completely agree on the first point, vehemently disagree on the second as you assume humanity as a whole is constantly improving over time. The earlier part of your generation is more akin to Gen X but the latter three fourths by-and-large has some serious work-ethic and cognitive issues. The proliferation of dumb phones I believe is also causing permanent damage. Some have hope for the next wave (“Z”) although females in the early cohort have indicated to me the males have much to be desired in terms of work-ethic, values, and maturity. Perhaps in time more will be revealed of them.

            “What they are, is criminally underpaid.”

            If one starts looking at economic models post 2005, nearly everyone is underpaid because the currency has significantly devalued and money velocity is sixty nine times lower than initially predicted (as of 2013). “Recovery”.

            “Indeed, during the prerecession period, for every 1 percentage point decrease in 10-year Treasury note interest rates, the velocity of the monetary base decreased 0.17 points, based on a linear regression model of the velocity onto interest rates. Since 10-year interest rates declined by about 0.5 percentage points between 2008 and 2013, the velocity of the monetary base should have decreased by about 0.085 points. But the actual velocity has gone down by 5.85 points, 69 times larger than predicted. This happened because the nominal interest rate on short-term bonds has declined essentially to zero, and, in this case, the best form of risk-free liquid asset is no longer the short-term government bonds, but money.”

            stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us

  • avatar
    28-Cars-Later

    Nice piece Bozi, I enjoyed it.

    • 0 avatar

      Thanks!

      • 0 avatar
        Motorhead10

        Bozi – do you know when these are installed? As in – if I stumble a cool car on a questionable BHPH lot and plan to pay cash – will that car have one installed already? Or is there a period where the dealer sends the car out after the purchaser with questionable credit signs the deal? I suspect the latter – but that would include the dealer either disclosing that they are having the unit installed, ‘wait here while we have your tracking unit wired up.’ or not ‘wait here while we have your new car detailed.’

        • 0 avatar

          It all depends on the individual dealer but the dealers I worked with would install them at the point of sale.

        • 0 avatar
          Scoutdude

          You aren’t going to find a cool car at a reasonable price and pay cash for it at a BHPH lot.

          One of the ways they make their money is by pricing their Branded title and/or high mile and/or poor condition car as if it was a pristine, clean title, low mile car.

          The other way they make their money is toting the note themselves or the spread on interest rate if they use a 3rd party lender.

          So selling it for cash to you would mean forgoing thousands in profit. They would rather hold on to it for a week or two, sell it for top dollar and make their back end money too.

          • 0 avatar
            sgtjmack

            Not necessarily. Most of the cars are priced reasonably, but the real money is made on the interest payments. Many of them make the money on the down payment, and the rest is their profit.

  • avatar

    I researched this stuff at one point-great article. The only part you missed, maybe not all systems have it, is the “decoy box” with a flashing LED, designed to be mounted somewhere other than the actual stop/start box. Removal of which, does nothing.

  • avatar
    I_like_stuff

    OMG!!! This is awful. People who buy cars with someone else’s money will have to pay the money back in order to drive the car. These dealers are LITERALLY worse than Hitler.

  • avatar
    SuperCarEnthusiast

    It keeps track of your movement and builds a history tracking database. Along with that , interest rates are credit card rates – 18%+.

  • avatar
    yankinwaoz

    What interference prevention do they have? What happens if they can’t get a GPS signal because of interference? What about interference with its radio transmissions?

    If they are “man-in-the-middle” boxes like pictured, sitting between the key and the actual starting controller, what prevents someone from simply bypassing the dealer lock? I would just wire around it, wrap it in foil, and see what happens.

    But on the other hand, I would hope I would never be desperate enough to buy a car like this.

    • 0 avatar
      PandaBear

      The geo fence doesn’t shutdown the car if it is out of the area, it only notify the title owner and the title owner can decide to either call and ask question, or shut it down manually. You wouldn’t want your high risk loan car end up oversea.

      It is expensive to be poor, I had a contractor who pays $300 a week for a mid 90s Santa Fe that’s almost a broken down POS. That’s the only car the lender will sell him and that’s enough payment to buy it many times over. He just doesn’t have the cash and he is always out of cash to pay for it (not sure what other high cost loan he has, or whether he has child support payment, or any addiction problem, or a criminal record that prevent him from finding higher paying job). Some mistakes are too expensive to be fixed and forget.

  • avatar
    pwrwrench

    It would be very easy for this type of gadget to send a message that it has been bypassed. One way would be to compare the voltage going from the key/ignition switch to the starter and the GPS location. If the car moves without that voltage being detected either the unit has been bypassed, the car has been towed (parked in wrong place?), or it’s a rare manual trans and was push started.
    In any event a message could go to whomever is monitoring the system and they could take whatever action they wanted.
    What I don’t like about this type of thing is the, already mentioned, potential for abuse. “Pay more money or the car won’t start”.
    As well as the poor installation, also mentioned, that could leave the driver stuck somewhere.
    I saw a lot of wiring harnesses messed up back in the early decades of car alarms. Probably still happens.

  • avatar
    CincyDavid

    I was under the impression that OnStar had the same ability to shut down a car if the loan got far enough in arrears…


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • YeOldeMobile: But a Mercedes can do the ‘Ring AND be luxurious! Or at least, that’s the counter-argument.
  • slavuta: Elantra Sport brakes feel super good. Even better than 2011 Mazda3 and on par with 2017 Mazda6. I had 1990...
  • sirwired: I’m surprised by this. The CR-V is a well-received and fresh design, while the RAV4 is pretty far...
  • YeOldeMobile: 1. I actually saw a new Lincoln Continental being driven by a little old lady the other day at the...
  • IBx1: Nail. Head. Hit.

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Mark Baruth, United States
  • Moderators

  • Adam Tonge, United States
  • Corey Lewis, United States