As the delinquency rate for auto loans in Canada increases, automakers are looking for measures to safeguard themselves against defaults. Ford Motor Company recently applied for a patent in the US for an automated repossession system in an effort to guarantee that their vehicles remain in the possession of customers who uphold their commitments.
Additionally, Global News California reported that the notion of a car being able to foreclose on itself is no longer speculative. Ford recently submitted a patent application in the US, which would enable cars to do just that. The patent, titled “Systems and Methods to Repossess a Vehicle,” was released on February 23 and describes the procedures and justification for automated repossession. Ford states in the patent how such a mechanism would assist in preventing conflict between the bank and the car owner.
Furthermore, following failure on payments, the car would be disabled, and the owner would receive multiple reminders and notices before the vehicle would be automatically repossessed. And any vehicle with an internet connection may have the system installed and use it to self-drive to a repossession business or an impound facility. This would be decided based on the distance, state, and other fees related to reclaiming the vehicle.
Unexpectedly, Ford is the only carmaker to have submitted a patent application for automatic repossession. However, the patent does not necessarily imply that the automaker will add a technological component to its product lines.
Ford had the option to file the patent to assert ownership of the concept before a rival. Regrettably, repossessions are becoming more frequent. Car loan default rates are reportedly rising in Canada, with roughly 2% of auto loans being overdue in 2021, as seen on Better Dwelling.
Moreover, Ford’s automatic repossession technology may be able to settle some disputes that could otherwise occur between car owners and lenders. Ford may have submitted the patent application, but this does not always indicate the carmaker would add a technological component to its product lines.
Often, patents are filed by a firm to claim ownership of an idea before a competition. Ford Canada was approached by Global News to see if a comparable patent was being worked on the north of the American border, but no response was given.
On another note, only Ford has submitted a patent application for automatic repossession. And it makes sense that Ford would want to safeguard itself from bad debts in a time of rising vehicle loan default by applying for this patent. But it remains to be seen how this system will impact the repossession procedure and whether it will be used going forward.