A GPS system equipped with an accident notification sensor can be highly beneficial for subprime lenders and BHPH dealers, especially when lending to borrowers with higher credit risk. Here’s how it can help:
1. Asset Protection
• Real-time Tracking: GPS technology allows the lender to monitor the vehicle’s location in real-time in cases of payment default. It enables quicker repossession and helps secure the asset.
• Accident Alerts: If the vehicle is involved in an accident, the GPS device, equipped with an accelerometer, sends instant notifications to the lender. This early information allows quicker assessment of the vehicle’s condition and initiation of insurance claims.
2. Insurance and Recovery
• Claim Assistance: In the event of an accident, the GPS system provides accurate information on the time, location, and severity of the incident, expediting insurance claims and protecting the lender’s financial interest.
• Loss Prevention: Immediate access to accident notifications helps determine if the vehicle is totaled or needs repairs, minimizing delays in recovery or insurance resolution.
• Storage Fees: Knowing if a vehicle has been towed to an impound yard can save the lender hundreds of dollars in storage fees.
3. Borrower Risk Management (Optional Feature)
• Monitoring Driver Behavior: Some GPS systems track driver behavior, such as speeding, harsh braking, and rapid acceleration. This data helps lenders assess the risk of vehicle damage and adjust lending practices (e.g., requiring higher down payments or rates for risky drivers).
• Loan Terms Optimization: Lenders can use GPS data to improve loan structuring. High-risk borrowers with poor driving habits may receive stricter terms or mandatory insurance policies to mitigate risk.
4. Improved Customer Communication
• Accident Response Support: If a borrower is involved in an accident, the lender can offer immediate assistance, such as notifying insurance providers or guiding the borrower on next steps. This strengthens lender-borrower relationships and improves loan performance.
• Payment Flexibility in Emergencies: If an accident renders the vehicle unusable, the lender may adjust payment schedules or offer deferrals, preventing default and improving borrower retention.
5. Fraud Detection
• Accident Verification: If a borrower falsely reports an accident, GPS data can verify the claim’s legitimacy, providing exact details on location and severity, reducing fraudulent claims and saving costs.
Conclusion
A GPS system with accident notification protects a subprime lender’s assets, reduces losses, and optimizes loan management. It provides valuable data on borrower risk and vehicle status, safeguarding investments and improving borrower relations.
Efrat Bogoslavsky
VP Revenue & Service
Ituran USA
954-328-8404
ebogo@ituranusa.com