Auto GPS

If your dealership is like most franchise and independent auto dealers in the US, the majority of your gross profit doesn’t come from the cars that are sold, but from the service and parts department. According to the National Automobile Dealers Association (NADA) 2018 , new vehicle sales represented about 58% of total sales, and only 26% of gross profit. In comparison, the service and parts department made up over 46% of gross profit for the majority of auto dealerships. So, while car sales keep people coming in the door, the service department is actually keeping the businesses afloat. This is why automotive service customer retention is so important and why using a solution like InTouch can help dealers generate more revenue.

The easiest way to maintain strong profits in the service department is to keep customers who bought cars coming back for oil changes, tire rotations and to replace belts, hoses and other parts when they wear out. But with so many choices out there, providing enough incentive for customers to continue coming back to the dealership for service can be challenging.

One way to incentivize people who bought cars from a dealership to come back for service is to provide relevant offers and discounts around the time that the service is needed. Getting the offer into customers’ hands at the right time is the key factor here. A deep discount on an oil change means little to a consumer who is still months away from needing one.  Most dealerships have systems in place to reach out or mail customers service coupons after a specific period of time. However, most vehicle service needs are mileage based, so these discount offers are delivered according to how much time has passed and are based on guesses.


Getting A Coupon Into A Customers Hands Exactly When They Need Service is the Key to Improving Service Retention


Most modern GPS tracking systems offer the ability to accurately track vehicle mileage and report this back to the auto dealership. This feature allows dealers to reach out via phone, email or send service discount coupons to customers exactly when they need them. This timely communication increases the chances that customers will respond or schedule service.

PassTime’s InTouch is a GPS-powered connected car and theft recovery solution that gives dealers 3X ROI on their investment through lot management, F&I resale. InTouch is also a highly effective service retention tool.

InTouch can be pre-loaded on lot inventory or installed at point-of-sale and resold to consumers as a connected car and theft recovery system. One of InTouch’s features is that it can track mileage driven on the vehicle and be programmed to send alerts back to a dealership when a mileage threshold is met. Once a vehicle reaches the mileage threshold, an alert can be sent to the dealer and integrated into the dealer’s CRM system. The dealership CRM system can then trigger a coupon to be sent, an email or call to the consumer with a relevant service offer based upon the mileage driven.

In addition to GPS-powered lot management and an opportunity for resale through F&I, InTouch can also increase automotive service retention. With InTouch’s service tracking feature, dealers can contact customers for service reminders based upon actual calculated mileage, instead of simply guessing miles driven based upon a time period. Providing service offers at relevant times can increase a dealership’s customer retention rate and generate more revenue for the service department.

For PassTime, compliance has always been an important part of our business.  From its early days to today, the company has worked diligently to educate national and local government regulators, consumer advocates, dealers, finance companies and consumers on the functionality and consumer benefits of GPS and Payment Assurance devices.


PassTime, an industry leader in GPS Tracking and Automated Technology Solutions, began marketing the first industry Payment Assurance technology in 1997.  At that time, 70-80% of the market was held by two payment assurance device companies, PassTime and On-Time.  Within a year, PassTime began working on the industry’s first Payment Assurance consumer disclosures, in late 1998.


PassTime, an industry leader in device compliance and device disclosure, has teamed with Hudson Cook, one of the nation’s most highly regarded law practices in the area of consumer financial services law, to create the first available training in payment assurance and GPS device compliance.


PassTime has a full time compliance officer and CFPB Service Provider documentation. The April 2013 CFPB bulletin reiterated the Bureau’s expectation that supervised financial institutions have an effective process for managing the risks of service provider relationships.


PassTime strives to ensure corporate wide compliance with new and emerging State, Federal Laws and Regulations.  IT compliance is also an integral part of PassTime’s implementation of best computing and management practices.

GPS Device Best Practices: The Do’s & Don’t’s 

The Do’s: 

  • Do have written policies and procedures for the use of the devices, including (but not limited to) the bullet points listed below.
  • Do fully disclose to the customer that the device is on the vehicle as a condition of financing, how the device works, and optional emergency procedures.
  • Do give written disclosure to the End User Consumer of a SID/GPS device being installed on the vehicle and used as a condition of the extension of credit under the RISC.
  • Do have written disclosures that include language outlining the fact that the device is installed on the vehicle, how it operates and will be used, and both the End User Consumer’s and finance company’s/dealer’s/device owner’s respective obligations related to the device.
  • Do have the consumer sign the disclosure.
  • Do track complaints and complaint resolution related to the devices.
  • Do use trained and/or certified in-house, third-party, or vendor supplied installers. 

The Don’t’s:

  • Don’t pass the cost of the devices, airtime or installation along to the consumer whose cars are to be equipped with the GPS or Payment Reminder devices associated to the RISC.
  • Don’t discriminate in any way who you require to have a device and who you don’t, as this may violate federal or state anti-discrimination laws.
  • Don’t disable a consumer’s vehicle without giving prior warning, if possible (prior warning is mandatory in California).
  • Don’t leave the vehicle disabled after a debtor makes an appropriate payment. Re-enable the vehicle as soon as possible.
  • Don’t use the GPS tracking functionality for any improper purpose.

by Eric L. Johnson and Corinne Kirkendall

We’ve all heard the horror stories about repossessions. The latest “repo gone bad” story we read concerned a mother in Maryland who tried to drive her Cadillac Escalade, carrying her three children, onto a lawn and into other vehicles, in an attempt to throw off a tow truck that had attached itself to her vehicle. Her SUV was “jerking violently” and pulled the tow truck toward an occupied vehicle. She did this in broad daylight, in front of a state office building, with lots of witnesses, including a Sheriff’s deputy. The Sheriff’s deputy drew his gun and ordered her to stop. She was arrested and handcuffed. One of the children in the vehicle, her eight year old daughter, suffered a neck injury as well.

Now, contrast this “repo gone bad” story with how the use of a GPS/Starter Interrupt Device (SID) might have occurred in the situation above. After missing the payment due date, the device would provide an audible tone signaling a payment has been missed and if it is not made the device will prevent her from starting the vehicle. After this warning period, when she turned off her vehicle, an activated SID would have prevented her from starting the vehicle. If she had an emergency, most reputable systems would permit her to phone for a code or for a signal to the device that would allowed her to start the vehicle. Using a SID in this scenario would have been helpful to her: no humiliation or reputational damage, no breach of the peace, no towing to an impound lot, no costly towing and storage charges to pay, and no damage to her credit rating for the repossession.

The GPS and SID landscape affects many or most members of the National Automotive Finance Association and the industry as a whole. One quarter of all new retail installment contracts issued are to consumers with subprime credit. Subprime credit scores do not just affect people impacted by the financial downturn and those in the lower economic tiers. We are talking about people from all walks of life, all economic statuses. GPS/SID devices help creditors mitigate risk on subprime credit, allowing them to offer credit to consumers who otherwise might not qualify. There was a time when a subprime credit history would nearly automatically disqualify a consumer for automotive credit. By using devices, automotive creditors have more options when it comes to who may be approved for credit. When evaluating a credit application, an automatic “no” can be turned into an “I think we can make this work”. While it is an unfortunate event that consumers fall behind in their payments to the extent that the vehicle is rendered unable to start, it is very likely that without the device, that consumer may not have qualified for the credit in the first place.

It is more important than ever to use these devices correctly.

How GPS Devices Work:

A GPS device is typically installed at the point of sale or at post repossession reinstatement. Not all GPS devices have payment assurance capabilities. Many are geolocation-only devices. A GPS device provides operational maintenance reporting. Manual locations are available as needed. A GPS best practice is to track with a purpose. Alternative available features may include: payment reminder (e.g. device tones or email), low power notification, anti-theft, starter-interrupt, and tow-detection notification.

How SID Devices Work:

Starter Interrupt Devices (SID) are typically installed at origination or as a condition of post repossession reinstatement. Devices can provide payment reminders (e.g., a series of tones) as scheduled by the creditor and disclosed to the consumer. Not all SIDs have payment reminders. If a payment is not received on its scheduled due date, the SID will send a command to prevent the vehicle from starting. (Note – the Payment Assurance Technology Association (PATA), the Association that serves the SID/GPS industry, recommends compliance with state right to cure notice and waiting periods prior to disablement.) Assuming proper installation, the device will not shut off the vehicle while driving. Emergency backup systems are also in place (based on the provider). Some examples are 1-800 numbers, emergency codes, etc.

Best Practices

The NAF Legal Committee will continue to keep you informed about legal and regulatory changes of interest to the subprime auto finance industry.

Eric L. Johnson is a partner in the Oklahoma City, OK office of Hudson Cook, LLP. He is a frequent speaker and writer on a variety of consumer credit topics. Prior to pursing his legal career, he spent many years working in various departments for his family’s car dealership. Eric can be reached at (405) 602-3812 or

Corinne Kirkendall is the Vice President of Compliance and Public Relations at PassTime. PassTime has developed a robust GPS and payment assurance technology compliance training for dealers, lenders and credit unions. As a supplier to those industries we see the need to ensure accurate and consistent information about state and federal laws surrounding GPS and payment assurance devices. For more information Corinne can be reached at (303) 962-4102

This article is provided for informational purposes and is not intended nor should it be taken as legal advice.

© Copyright 2015 Eric L. Johnson and Corinne Kirkendall. All rights reserved. Single print publication rights National Automotive Finance Association.

HC# 4847-6510-1094