Car finance 'kill switches' immobilise cars if payments are missed

Motorists who fail to keep up with car finance payments can have their cars remotely immobilised to by the finance firms

Van finance explained

Car finance providers are installing 'kill switches' on customer cars that immobilise the vehicle if monthly payments are missed.

The GPS devices are often offered as part of subprime car finance deals to buyers with poor credit scores. The devices allow lenders to remotely disable cars if borrowers fail to keep up with the payments.

The immobilisers are said to be installed behind the dashboard of cars. When drivers make their monthly payments they receive a code to enter into the device via a remote control to keep the car running. If they fail to keep up with payments, the lender will not send the code and the car cannot be started. 

Best car finance deals 

Stoneacre, a finance provider offering such schemes said the kill switch device had cut default rates by 500 per cent. Another firm, Car Finance Company said the device is a handy reminder for owners to keep up with payments. 

The Finance and Leasing Association said immobilisers were “used by a minority of the industry in very limited circumstances. A customer must always be made aware that their vehicle has been fitted with one of these devices – and the circumstances in which it could be used must comply with FCA [Financial Conduct Authority] regulations.” 

Car finance market faces a potential mis-selling scandal

However, whether the devices are legal has been put under question. Graham Hill, a board member at the National Association of Commercial Finance Brokers questioned the legality of vehicle immobilisers.

The Financial Conduct Authority recently launched an investigation into the vehicle finance sector after reports of “irresponsible” lending practices. The FCA has yet to confirm whether immobilisers form a part of its investigation

Would you want an immobiliser as part of your finance deal? Tell us your thoughts in the comments below... 

Recommended

Electric car charge points to be installed in every new home in the UK
Home charging point
News

Electric car charge points to be installed in every new home in the UK

England will be the first country in the world to introduce mandatory electric car charging points for new-build homes
10 Sep 2021
Government asks for more Smart Motorway safety data with revised Highway Code on the way
smart motorway
News

Government asks for more Smart Motorway safety data with revised Highway Code on the way

A revised version of the Highway Code will cover Smart Motorway driving, as National Highways pledges to improve data and monitoring
8 Sep 2021
E10 petrol explained: UK prices, checker tool and is it OK for your car?
Petrol pump
News

E10 petrol explained: UK prices, checker tool and is it OK for your car?

E10 petrol is up to 10 per cent ethanol and is available at UK fuel stations now as part of the bid to cut CO2 emissions
1 Sep 2021
Over 5.5m cars had MoTs delayed under Covid extension
MOT testing station
Consumer news

Over 5.5m cars had MoTs delayed under Covid extension

More than a fifth of drivers took advantage of MoT extension, with motorists warned MoT bookings will be in high demand this September
8 Aug 2021

Most Popular

'The death of cheap cars will be a travesty for personal mobility'
Opinion cheap cars
Opinion

'The death of cheap cars will be a travesty for personal mobility'

Our appetite for small, cheap cars is as strong as ever - although Mike Rutherford warns they may no longer be profitable
12 Sep 2021
New Toyota RAV4 Adventure heads up 2022 model refresh
Toyota RAV4 Adventure
News

New Toyota RAV4 Adventure heads up 2022 model refresh

The rugged Toyota RAV4 Adventure targets lifestyle buyers with a tough-looking new front bumper and interior tweaks
14 Sep 2021
E10 petrol explained: UK prices, checker tool and is it OK for your car?
Petrol pump
News

E10 petrol explained: UK prices, checker tool and is it OK for your car?

E10 petrol is up to 10 per cent ethanol and is available at UK fuel stations now as part of the bid to cut CO2 emissions
1 Sep 2021