LITTLETON, Colo. — Buying a car is stressful for anyone, but especially those who don`t have a good credit score.
“There are a lot of places that have a lot of things they need you to do before they’ll sell you a car,” Janet Ardolino said. “It can make it tough to actually buy one.”
Ardolino is like so many other car buyers these days — dealerships just don`t want to take the risk on customers who can’t get financed at big banks.
“I have seen some really good people that unfortunately show signs of the times,” Isis Kearney at DJ auto sales said. “Their credit has taken a hit.”
But in the mid 90s, Littleton-based company Passtime changed the game, with a man at the helm who is very familiar with the dilemma of car buying.
“I used to be one of those customers,” said Stan Schwarz, Passtime CEO & founder. “Back in the 80s, I had some credit issues.”
Schwarz was in the car alarm business back in 1996 with partner Jake Frank when they were asked by a car dealer if they could make a product that could monitor “credit-challenged” customers.
The device they came up with is quite simple. It`s installed like a car alarm, and a series of beeps remind car owners when their payment is past due.
Say you haven’t made your car payment for a couple of days. You would hear a beep when you start your car and when you turn it off that would last for about 20 seconds.
And if you wait too long to submit your payment, you`ll hear a different beep. This one means your car has been shut down remotely. As if that weren’t enough deterrent for late payers, a GPS system can track your car for repossession if you don’t pay up.
“It allows the lender to take a little bit more of a risk,” Schwarz said.
The first unit was bought by a Denver dealership in 1997 for $150. A year later, they had sold 300 units. Now Schwarz says the company is going to do well over $20 million in sales this year.
The success is in large part due to the fact that Passtime not only protects dealerships, but also helps the car buyer.
“Some of the smaller dealers require more down,” Kearney said. “I’m able to do it with a little bit less and work with people. First time buyers, people who’ve filed for bankruptcy, I can do all of them.”
Customers say they enjoy the product too.
“I hear that beep and I know it’s time to make a payment,” Ardolino said. “But it’s great, it’s kind of like having an alarm clock.”
Without the device, dealerships and lenders typically see 30 percent of their customers make late payments. But with Passtime, that number is cut to below 7 percent. With numbers like that, dealerships nationwide are buying in, and the company is even talking about expanding overseas.
The device also serves as an anti-theft system, and in several cases law enforcement agencies have been able to track stolen cars through the Passtime GPS feature.