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Right on Time

This device keeps car payments from going delinquent.

What: Car starter-interrupt devices that immobilize vehicles when payments are not made on time
Who: Jake Frank and Stan Schwarz of PassTime
Where: Littleton, Colorado
When: Started in 1997
How much: $5,000

W hen they first introduced their product, PassTime creators Jake Frank and Stan Schwarz received a lot of opposition to the car starter-interrupt devices, which they tried to sell to new-car dealerships as part of a payment plan offered to customers. Once they're installed, PassTime's products immobilize the car after a certain number of days if the owner does not make car payments on time.

"On the surface, we look like bad guys, trying to shut people's cars off," says Frank, 53. "But essentially what we're doing is changing people's behavior. Their car payment becomes a high priority--they can't put [it] off for a day, or they lose one of the most important things to them: their mode of transportation."

"We help rebuild their credit," Schwarz adds, citing that the average delinquency on a loan in the sub-prime market drops from 30 percent to under 5 percent when a PassTime product is installed. The number of repossessions drops from 15 percent to less than 2 percent.

Schwarz, 51, speaks of his target market from personal experience. In the '80s, he was unable to buy a car due to bad credit. Today, PassTime enables people in situations like his to qualify for car loans. By incorporating one of four devices, car dealerships and finance institutions can negotiate payment periods and offer higher-value vehicles while tracking their assets.

In early 2007, the company, which projects 2006 sales of over $15 million, will introduce a new product that incorporates GPS tracking into the standard starter-interrupt, code-based payment system.

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This article was originally published in the November 2006 print edition of Entrepreneur with the headline: Right on Time.

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