2006-07-23T16:21:00.000-07:00

One day each month, Vista resident Sheena Casto punches a six-digit code into the blinking device under the dashboard of her 2000 Saturn SL. Though it resembles a radar detector, the little gizmo is her key to a lower interest rate and ---- when she makes her monthly payment ---- to another 30 days of uninterrupted driving.The device is also a key to one of the thorniest dilemmas facing car dealers and finance companies: whether to offer car loans to customers with low credit scores. Financing often helps a dealer sell a vehicle that might otherwise be out of the customer's reach. But when the driver doesn't repay the loan, the dealer's profit can easily be outweighed by the costs of collection or repossession.

Martin Oleksyk said that logic used to mean lost sales for his group of seven Saturn dealerships in Temecula and San Diego County. The group didn't offer in-house financing, and the finance companies it used were not willing to offer car loans to all the potential customers.
But starting about three years ago, the group began offering loans to customers who were turned down by the other lenders. To safeguard those loans, the dealerships install "On Time," a small device made by Payment Protection Systems Inc., of Temecula.The device, about the size of a cigarette pack and typically mounted just under and to the right of the steering column, flashes yellow when a payment deadline approaches. After paying, the customer calls the lender and gets the code that will allow the car to start until the next deadline.When customers miss payments, the device prevents their cars from starting."Most of these people have a hard time budgeting," said Oleksyk, who manages the new finance program at the Saturn dealerships. "They have the ability to pay.

They have the capacity to pay. They just don't know how to pay."Starter-interrupt devices are becoming a popular way for lenders to ensure they're repaid, and many borrowers seem willing to accept them to get into nicer cars, get away with smaller down payments and qualify for lower interest rates, according to dealers and device manufacturers.Among cars with On Time installed, only about 2 percent of the car loans go delinquent, according to Mike Simon, chief executive of Payment Protection Systems. That compares with an average of about 15 percent among all cars, Simon said.

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