Legal landscape note: This article was originally published in 2017 and describes the law as it stood at that time. New Jersey law changes frequently.
You are a payment or two behind on the car loan -- a job loss, medical bills, food on the table coming first -- and one morning the car will not start. Not a dead battery: a "payment assurance device," installed as a condition of your financing, has disabled the ignition. These devices are put in financed vehicles for buyers with bad credit or no credit, and they can shut the car down when the owner falls behind on payments. Like any other control, they can be abused.
We will have to wait and see what our esteemed government officials will do. The legislature has already given approval of the revised bill.
Stay tuned.
Source: Michael Booth, March 15, 2017.
The New Jersey Senate has given final legislative approval to a bill that would regulate and restrict the use of payment assurances devices on automobiles, which are attached to cars and trucks under finance and are used to disable the ignition if the owner falls behind in his or her payments.
Both the Assembly and Senate passed the bill a second time after Gov. Chris Christie made a number of recommendations in a conditional veto in February.
The devices primarily are installed on vehicles purchased by those with little or no credit history, or a bad credit history, according to the sponsors.
Proponents of the legislation say that often, those purchasers have no choice but to agree to the installation of those devices if they are going to be allowed to make a purchase through financing. The sponsors--Assemblymen Paul Moriarty, D-Washington Township; Craig Coughlin, D-Middlesex; and Raj Mukherji, D-Hudson--estimate that about 2 million such devices have been installed nationwide.
Currently, New York, Pennsylvania, Rhode Island and Virginia are all considering similar legislation, the sponsors said in a statement.