While car finance or even taking any form of debt might be desirable by anyone, the decision by many people to pay for a car or credit is quite understandable. Purchasing a car is such a big investment that can be a bit difficult to undertake outright. Therefore, car finance looks to be the best possible option for persons that cannot afford to purchase in cash but need a car for their daily activities. This is particularly true for those that have a relatively decent credit rating and can afford to make the repayments.
While getting car finance for people with good credit looks abut straight-forward, the big question is what happens to those at the other end of the spectrum. These are people with shaky credit history and will most likely find it difficult to get the best deals on car finance as they only qualify for sub-prime loans. However, things have taken a twist with the advent of black box car finance technology, which has been in operation in the United States for several years being introduced in the UK car market.
How does the black box technology relate to cars?
The technology has been around for a while, with insurance companies using it as a GPS for tracking and monitoring the performance of drivers. The primary aim of the black box technology and the insurance companies using it is to offer better, more personalised, insurance premiums, particularly to younger drivers who drive carefully. This is so as not all young drivers handle the steering wheel the same way.
The advent of the black box technology led to the emergence of the “payment box” as a way of making sure that car finance customers, particularly those with bad credit do not miss repayments. This is seen as an innovative approach for mitigating the risks of customers getting into car finance debt, while also helping finance companies to widen their scope for customers and consequently increasing their overall profit.
How does the concept work?
The major distinguishing element of black box car finance is the payment box, a small device that is fitted into the financed car with the consent of the customer. The device is configured to notify the customer once the car finance payment is due. It starts to flash, alerting the customer of the need to make a payment to avoid late payment. The concept is particularly great as the device is activated remotely if the customer is late for several days, and the vehicle stops to work until the outstanding arrears are paid.
The system is designed to ensure that the vehicle is disabled only when not in motion to avoid causing accidents. A numerical code is sent to the customer from the car finance company, which is entered into the device to allow the car to start working again once the payments are up to date.
The payment box also works like a GPS, allowing for the easy location and recovery of vehicles can should they need to be repossessed. click here for more information about black box car finance