Ford Could ‘Lock Out’ Vehicle Owners for Missing Loan Payments Under New Patent

A logo of Ford on a car at the 86th International Motor Show in Geneva, on Mar. 1, 2016. Denis Balibouse/Reuters

American automobile manufacturer Ford has filed a patent regarding a repossession system that can automatically lock out vehicles in case owners do not make auto loan payments in time, and even move autonomous vehicles to a place of its choosing.

The patent application (pdf) pertains to “systems and methods to repossess a vehicle.” According to the application, the new system will involve two computers, one of which could be associated with a financing agency, such as a bank or lender, while the second computer might be an onboard computer or smartphone owned by the vehicle owner.

The patent application gives an example of a delinquency notice to explain how the repossession system would work. In such a situation, the repossession computer, located at the bank, sends the vehicle owner a notice of payment delinquency. The notice will also contain instructions to acknowledge receipt of the message.

“When an acknowledgement is not received within a reasonable period of time, the first computer may disable a functionality of a component of the vehicle or may place the vehicle in a lockout condition. The lockout condition may be lifted momentarily in case of an emergency to allow the vehicle to travel to a medical facility,” the patent application states.

The repossession computer can also activate the vehicle’s audio component to emit an “incessant and unpleasant sound” every time the owner is in the vehicle. The computer will ensure that the owner is unable to switch off the sound without first getting in touch with the financial institution.

If the payment issue is not resolved and the vehicle is an autonomous one, the repossession computer can “cooperate” with the vehicle computer to “autonomously move the vehicle from the premises of the owner to a location such as, for example, the premises of the repossession agency” or other locations.

The repossession computer can also move the vehicle to a junkyard in case it determines that the market value of the vehicle is below a predetermined threshold. The patent application was filed on Aug. 20, 2021, and published on Feb. 23, 2023.

Car Payment Delays

Ford’s repossession system comes as Americans are falling behind in car payments at the highest rate since the Great Recession. “1.84 percent of auto loans are now severely delinquent. The highest rate since February 2009,” said auto analyst CarDealershipGuy in a tweet on Jan. 25.

According to a Feb. 20th post by Jerry, a company offering vehicle insurance comparison services, new “serious delinquencies” on auto loans—payments overdue for at least 90 days—hit a five-year high by the end of last year for individuals in the age group of 18–29.

For those aged 30–39, such delinquencies have hit the highest level since 2019. Combined, these two demographics account for almost $20 billion in auto loans that fell into serious delinquency last year.

The high cost of car ownership made 52 percent of GenZ drivers delay a non-car monthly payment by at least 30 days in 2022. Among millennials, this figure stood at 33 percent.

In a tweet on Dec. 16, 2022, CarDealershipGuy speculated about a potential storm of repossessions this year. In the previous two years, many people had taken out loans to buy cars that were being sold at high prices. Now, things have changed.

“Car valuations are now plummeting. Some cars have declined in value as much as 30 percent year over year. And these same people that took out these big loans are now ‘under water.’ Basically, they owe banks more on these cars than they are worth,” CarDealershipGuy said. “I’m now convinced that there is a massive wave of car repossessions coming in 2023.”