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Late on payments? Big Data shows repo guys where to look to repossess vehicles

Updated: Dealerships are turning to monitoring driving habits to direct repo crews to where cars are most likely to be when payments falter.

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Telefonica

When vehicles are on finance, there is a variety of issues relating to late or missing payments.

Financial problems, illness, and more can mean that owners can no longer afford their means of transport, and dealerships are left with the task of chasing payment.

As a last resort, repossession crews may be sent to recover vehicles to recoup some of the lost funds.

However, tracking owners can be a lengthy and costly task, especially when vehicles are not present at home addresses.

ERM Advanced Telematics hopes to provide dealerships with a solution to the problem. While many automakers and technology vendors are focusing on next-generation solutions, infotainment, and autonomous driving, ERM develops sensors for a very different reason.

The company's new Parking Habits service is for dealerships that offer Buy Here Pay Here (BHPH) financing options. The solution, embedded within vehicles, monitors driving and parking habits.

Parking Habits sensors and software are embedded into StarLink tracking units, connected to the service provider's servers, which allows the software to continue to operate even if the driver disconnects or destroys the StarLink trackers.

Where a car has been parked over days, weeks, months, and even years, is all recorded, in addition to the frequency of when a vehicle has been parked in particular spots.

When a driver fails to make payments on time, the dealership can use this data to predict where the vehicle is likely to be parked at particular times of the day -- and send in a repo crew to pick it up.

However, the snooping goes further, as the company says the software can also be used to predict potential payment problems:

"The car financing company is able to see if, when and how the drivers have changed their parking habits in a way that requires the company's attention.

For example, if the alerts highlight a driver that has stopped parking each morning near his or her workplace, it might suggest that the customer has lost his or her job and might have difficulties in paying for the car on time."

According to ERM, dealerships in the US and South America that have signed up have retrieved roughly 400 cars in only a few weeks. The company says that this will save dealers "millions of dollars" (although how this is calculated is in question).

"Our Parking Habits service greatly reduces the risk companies take when offering car financing, and allows them to quickly, easily, and at minimal risk and cost retrieve vehicles for which they did not receive the required payments," says Eitan Kirshenboim, CMO of ERM.

It is not known how this data is stored, managed, or secured, nor is it known how long the information is kept.

For dealerships, having a way to keep track of vehicles on finance -- which therefore still belong to them -- is a tantalizing prospect and one which can, in theory, save them a small fortune in repossessing vehicles.

However, tracking and surveillance relating to where a driver goes, where they work, what times they are driving, and where they go on weekends, is not such a palatable prospect for owners.

See also: How to take Amazon's Alexa with you in the car

If the solution is offered to consumers, for example, in exchange for a lower rate of interest -- in the same way that the UK's "black box" trackers are meant to lower the cost of insurance for new drivers -- then at least the choice is given to consumers to be monitored.

If not, and without any assurances on how this personal information is secured and managed, it may be seen simply as an outright breach of privacy.

Update: 11.57GMT: An ERM spokesperson said that if "we took an average vehicle price as $20,000, times 400, [this equates to] $8 million in potential recovery proceeds.

When asked how data is stored and protected, the spokesperson said:

"These issues are taken care of by the service provider, the data is stored on his servers under his policy, he is in charge on the data and on the legality of the service."

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