Deal Pack Blog
Are GPS Devices an Asset or an Expense?
As a Buy Here Pay Here (BHPH) Dealer or Subprime Lender, it’s likely you’re familiar with GPS technology to track vehicle assets. Typically devices are purchased for a couple hundred dollars each and you pay the provider a fee to keep the device on their GPS network. Now the device is installed on the vehicle and you wait to see if the customer defaults on their loan. You wait to confirm the device is functioning properly to locate the vehicle in an attempt to repossess. If this is your practice, then it’s likely you are looking at GPS devices as an expense. If the device works properly and you get the vehicle back, the expense was worth it. If it fails, it could be costing you money.
An effective collections staff can make the difference of the device being an expense or being an investment. Communicating with customers to keep them in their vehicles, making regular payments and reducing delinquency is key. Securing one extra payment from each customer will typically pay for the device. Bringing in a second extra payment or more can provide a return on your investment.