A GPS system equipped with an accident notification sensor can be highly beneficial for subprime lenders and BHPH Dealers, especially when lending to borrowers with higher credit risk. Here's how it can help:

1. Asset Protection

• Real-time Tracking: GPS technology allows the lender to monitor the location of the vehicle in real-time in cases where the borrower defaults on payments. This enables quicker repossession and helps secure the asset.
• Accident Alerts: If the vehicle is involved in an accident, the GPS device which is equipped with an accelerometer sends instant notifications to the lender. This early information allows the lender to react more quickly in terms of assessing the vehicle's condition and initiating insurance claims.

2. Insurance and Recovery

• Claim Assistance: In the case of an accident, the GPS system can help provide accurate information regarding the time, location, and severity of the incident. This data can assist in expediting insurance claims and protecting the lender's financial interest in the vehicle.
• Loss Prevention: By having immediate access to accident notifications, the lender can quickly determine if the vehicle is totaled or needs repairs, minimizing delays in recovering or resolving the situation with insurance companies.
• Storage fees: knowing if the vehicle has been towed to an impound yard, can save the lender hundreds of Dollars in storage fees.

3. Borrower Risk Management (optional feature)

• Monitoring Driver Behavior: Some GPS systems can monitor driver behavior, such as speeding, harsh braking, and rapid acceleration. If borrowers are engaged in risky driving, the lender can use this information to better assess the risk of damage to the vehicle and adjust their lending practices accordingly (e.g., requiring higher down payments or rates for risky drivers).
• Loan Terms Optimization: The lender can use the data collected from the GPS to improve their decision-making when structuring loan terms. For example, high-risk borrowers with poor driving habits may receive tighter terms or mandatory insurance policies to mitigate the risk.

4. Improved Customer Communication

• Accident Response Support: If the borrower is involved in an accident, the lender can offer immediate support by informing insurance providers or providing guidance on the next steps. This can strengthen the relationship between lender and borrower, potentially leading to better loan performance.
• Payment Flexibility in Emergencies: If an accident renders the vehicle unusable, the lender may have the option to temporarily adjust payment schedules or offer payment deferrals, which could prevent default and improve borrower retention.

6. Fraud Detection

• Accident Verification: In case of fraudulent claims where a borrower might report an accident that didn’t occur, the GPS data can be used to verify the legitimacy of the accident. The system can provide exact details on the accident’s location and severity, reducing the chances of false claims and saving costs.

In summary, a GPS system equipped with accident notification can protect a subprime lender's assets, reduce losses, and optimize loan management by providing better data on borrower risk and vehicle status. This helps both in protecting the lender's investment and improving borrower relations.

Efrat Bogoslavsky
VP Revenue & Service
Ituran USA
954-328-8404
ebogo@ituranusa.com