Car kill switch: How car finance companies are using them to make customers pay
If you get a car on finance, make sure you keep up with your payments. If you don’t, your finance company could stop you in your tracks with a car kill switch.
A car kill switch lets someone stop your car remotely. If you fail to meet your payment deadlines, that’s exactly what your car finance provider could do.
This new measure means you’d then be unable to move your car. And it’s causing some experts to say it could put drivers in danger.
Let’s look at how car kill switches work and how some finance companies are using them to pressure customers.
How a car kill switch works
Finance companies can install the car kill switch technology in vehicles before the customer drives it off the forecourt. They might do this if the customer has a poor credit history or a history of missing payments.
If this happens to you, you’ll get a code to enter into a device in your car. You’ll get one of these codes when you make your monthly payment on time. As long as you keep up with payments, you’ll get the codes and your car will keep running as normal.
But if you miss your finance payments, the finance provider can use the car kill switch to disable the vehicle. You won’t get another code and you won’t be able to drive the car anymore.
Some lawyers and car finance experts are worried about the way finance companies are using the car kill switch. They say that customers could have no way to drive in an emergency if they forgot to pay.
The Financial Conduct Authority (FCA) is now conducting an investigation into the car loans market. As part of this, they’ll be looking at car kill switches. The FCA will also make sure that finance providers are properly checking to see if borrowers can meet their payments.
Can you do anything about it?
Until we see the results of the FCA investigation, finance companies can keep using car kill switches.
Check your finance agreement to see if it says the company can install a car kill switch in your vehicle. If it says they can and you’ve signed it, they’re not doing anything wrong. The company should treat you fairly though, so they should send you warnings to say they’re going to disable your vehicle if you don’t pay.
And if you don’t want the kill switch in your car, speak to your car finance provider about this. They don’t have to remove it but if you always pay them on time, they might be more likely to.
Don’t ever try to remove the car kill switch yourself or pay someone to do this. This can affect your car finance agreement and it’s possible your provider could fine you for this.
Are you thinking about getting car finance? Find out what you need to consider before doing this with our car loan blog.