Device Prevents Cars From Starting If Loans Aren't Paid, Helps Drivers Establish Credit

LITTLETON, Colo. (CBS4) - Erin tried to buy her first car when she was young and had no credit history.

"I didn't have anybody to cosign," she said.

The interest rate on a car loan for her was going to be astronomical. But a device called Passtime helped her establish credit and buy a car.

Passtime is affixed to a car and prevents it from starting if the owner doesn't make loan payments on time. It's targeted toward people with no credit history or poor credit scores.

"If you were a consumer with bad credit and you tried to go to buy a car, you're often going to get turned down," Chris Macheca of Passtime said.

If you're not turned down, you'll likely face a really high interest rate on your car loan. Without the device, interest rates are between 20 percent and 29 percent, Branda Abbott with Colorado Credit Union said. With the device, rates are between 10 percent and 13 percent.

If the owner pays on time, the car will always start and after a year the interest rate will go down one percentage point every 12 months.

"Basically we're serving the unserved," said Steve Brozovich of AutoTrek, a used car dealership in Littleton.

Car dealers say love how the device has promoted car sales.

"They're getting a good interest rate, with a good credit union and they're getting a good car, a car that's going to be dependable," Brozovich said.

There is a way for drivers to get a one-time emergency code to override the system if they haven't made their monthly payment and the car has been disabled. The code works for at least 24 hours.

"If someone were to get in your car with you, they would have no idea that this device is there," Macheca said.

The Littleton-based company says there are more than one million of these devices on cars currently.

Erin, who asked that her last name not be used, says she's a mountain girl and wanted a car for road trips. Thanks to Passtime's subtle monthly beeping, she is not facing debt from buying this newest car.

"I feel grown up and established," she said.