Driving the Road to Recovery

Title:  SECURE TRANSPORTATION ASSISTANCE REDEMPTION SYSTEM

Synopsis:

The Secure Transportation Assistance Redemption System (S.T.A.R.S.) is a solution to the overwhelming need for consumers in the automotive market which allows consumers with less than perfect credit scores ranging from 450 to 575 to qualify for traditional automotive loans.  It allows consumers an opportunity to purchase a new or used vehicle by utilizing dealers’ incentives and rebates as a down payment.  The S.T.A.R.S program also mitigates the risks usually associated with financing consumers at this level. 

How does the program work?

Similar to the C.A.R.S. Program that drew from a government budget, the S.T.A.R.S Program will also replace less fuel-efficient cars with the assistance of National Highway Traffic Safety Administration & U.S. Department of Transportation. The S.T.A.R.S Program will allow all automotive manufacturers to install a data chip into their new and used vehicles.  This electronic chip will act as a tracking, monitoring and operation device.  This device will activate only after the consumer has defaulted 60 days in the loan and give more control and security to the financial institutions as it minimizes their risk and percentage of repossessions, missing vehicles, stolen vehicles and loan defaults.  This increases the loan approvals for financial institutions, while widening the customer base for car dealers, insurance brokers, etc.  Most financial institutions do not want to lend money to consumers with “bad” credit because their credit typically reflects a history of late or non-payments, leaving the bank to eat the cost of the depreciated vehicle.

·         Tracking – The S.T.A.R.S data chip acts as a tracking device, allowing the vested institution to know where the vehicle is at all times.  If vehicle is hidden or stolen, it can be quickly recovered with the assistance of local law enforcement.

·         Monitoring – The S.T.A.R.S. Program monitors the payment activity, maintenance and security of each vehicle approved under the program.  When the consumer has registered insured or serviced the vehicle, unlike CarFax, it automatically updates in the financial institutions’ database.

·         Operation - The S.T.A.R.S. data chip acts as “kill switch” which is controlled by several call centers operated by each financial institution.  If a consumer falls 60 days behind payments or defaults on the loan, the financial institution can quickly locate the vehicle, deactivate the ignition and repossess the vehicle.

Level 1:  Monitoring / Service (0 – 12 months)

At this level, customers will be monitored strictly for adherence to payment terms and other program requirements (i.e. current registration and insurance) for the first 12 months of financing. This gives the bank an opportunity to retrieve the vehicle promptly after any 60 day loan default.

Level 2:  Service (12 – 24 months)

Customers who have successfully adhered to payment terms and other program requirements for the first 12 months qualify for Level 2: Service. At this level, customers will qualify for a reduced interest rate for remaining balance of the loan. 

Loan Defaults:

A loan default is 60 consecutive days with no payment. 

Reconciliation:

Consumers whose vehicles have been deactivated or repossessed can retrieve their vehicle for up to 30 days by remitting full payment of the overdue balance via cash or credit card.  If the vehicle is away from the consumer’s residence, operation of the vehicle can be reactivated at the discretion of the financial institution for an emergency only for a limited time.

Section 4:  Anti-Terrorism / Crime Prevention

The 1993 World Trade Center bombing occurred on February 26, 1993, when a car bomb was detonated below the North Tower of the World Trade Center in New York City. The 1,500 lb (680 kg) urea nitrate–hydrogen gas enhanced device was intended to knock the North Tower (Tower One) into the South Tower (Tower Two), bringing both towers down and killing thousands of people. It failed to do so, but did kill six people and injured 1,042.  In November 1997, two more were convicted: Yousef, the mastermind behind the bombings, and Eyad Ismoil, who drove the truck carrying the bomb.

The Financial Anti-Terrorism Act of 2001 (H.R. 3004) was a bill calling for the Federal Government to have the increased ability to control and monitor financial criminals and the ability to sentence them.

The S.T.A.R.S Program data chip technology prevents terrorism and crime by allowing the military, the FAA and the US Department of Transportation to track, monitor, control and apprehend any airline, train, boat and vehicle that is in operation.  The S.T.A.R.S Program system provides 24 hour live video surveillance in airline cockpits, passenger and stewardess cabins, which can be accessed in the Airport Tower and via secure access online.  In an emergency, the S.T.A.R.S system will release non-toxic sleeping gas, subduing any potential terrorists, passengers and staff.  The FAA, military and the Airport Traffic Control Towers can then override the system and automatically take control of the aircraft, safely landing the aircraft and all its passengers and staff with zero casualties, until further investigation.

·         Consumers – The S.T.A.R.S. Program will provide access to auto loan approvals for consumers whose credit has been effected by the economic downturn.  Consumers will take advantage of manufacturer rebates, discounts and incentives as down payment assistance to structure the loan.  The consumer will also have a wider selection of desired vehicles to choose from. 

“The credit scores of millions more Americans are sinking to new lows.  Figures provided by FICO Inc. show that 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. It's unlikely they will be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.”[1]

·         Automotive Manufacturers / Dealerships – More customers equals more vehicles sold.  Manufacturers/Dealerships will also receive more federal tax breaks on each vehicle sold at its actual blue book value.  Any dealer that sells vehicles at a maximum of $3,000 above blue book wholesale value will receive tax credits.

·         Financial Institutions - Financial Institutions will gain more customers and assume less risk for each consumer financed under the S.T.A.R.S. Program.  They will also establish more professional relationships with local dealerships.  In addition to generating more revenue from new business, financial institutions who participate in the S.T.A.R.S Program will receive up to 10% of the one-time registration fee ($100,000) from each dealership that has registered:

S.T.A.R.S PROGRAM

FLOW CHART

·         Economy – The S.T.A.R.S. Program is structured to create jobs for financial institutions - call centers to monitor vehicles, payments, etc.; car dealerships – sales, service, marketing and operations.  The S.T.A.R.S. Program also generates revenue for residual organizations such as the DMV, insurance brokers, vehicle service and maintenance organizations, gasoline and petroleum companies, and many other organizations to which drivers have more access than pedestrians.  The state and federal government will also receive taxes paid on all of the above.

·         Jobs – The primary goal of the S.T.A.R.S Program is to provide long term stimulus, fuel efficient vehicles, and create employment opportunities across multiple industries such as auto industry from manufacturers to sales, financial institutions, collections agency, Monitoring call centers, repossession companies, law enforcement, Department of Motor Vehicle, Insurance companies, gasoline and petroleum companies, vehicle service and maintenance organizations and etc. More vehicles on our national Highways, means an increased employment demand for vehicle related services:

a.)  Law Enforcement – Increase traffic on all national highways requires employment for more law enforcement to police new drivers.

b.)  Automotive Sales – More consumers bombarding our nation’s auto dealerships will require an overwhelming employment need to supply a more robust sales force to fulfill the demand.

c.)  Maintenance & Repair Shops – As more consumers utilize their fuel – efficient vehicles on a daily bases, the need to maintain proper mechanical operation is required.

d.)  Auto Manufacturers – As auto dealership sales soar, factory workers that have been laid off will be reinstated for new employment opportunities.

e.)  Banking – The S.T.A.R.S Program will create new employment opportunities for financial institutions by developing several a monitoring call centers.

·         Driver Accessibility – A vehicle opens up more options for the drivers and their families to commute farther for employment, than public transit commuters. It also provides better access to consumers to reach more retail shops, services and restaurants to increase consumer spending.

Section 6:  Who covers the cost?

The upfront costs for manufacturing and design of the S.T.A.R.S. data chip will be covered by private investors or the Federal Government in the form of an RFP. Once the S.T.A.R.S program is implemented at the manufacturer and dealership levels, a one-time enrollment fee of $100,000 is paid by the auto manufacturer and a one-time enrollment fee of $10,000 is paid by the local auto dealerships to the private sector, and a monthly maintenance fee of $50 is paid by the customer as part of the monthly payment to the private sector/financial institution who remits the payment to the S.T.A.R.S Program.

Section 7:  ABOUT S.T.A.R.S

The Secure Transportation Assistance Redemption System (STARS) is a $3 billion long-term national program that helps consumers with low credit scores of 450-575 to buy or lease a more environmentally-friendly vehicle from a participating dealer when they buy a fuel-efficient car or truck. The program is designed to energize the economy, boost auto sales, create jobs, and put safer, cleaner more fuel-efficient vehicles on the nation’s roadways.

ELIGIBILITY:

To be eligible for the program a dealer must offer manufacturer factory rebate or discounted cars and trucks. The vehicle must be drivable, insurable and consumers must provide a valid license; both domestic and imported vehicles are eligible for the program. The consumer credit score must range between 450 -575 to apply toward the purchase or lease of new or used vehicles. Requirements for work trucks are slightly different. Other traditional auto financing requirements apply.

PRIVACY DISCLOSURE / WAIVER: 

Customers participating in the S.T.A.R.S Program must sign a waiver of consent allowing the financial institution and its affiliates to obtain any and all data relevant to financing, collection, repossession, tracking and monitoring associated with the vehicle.  Customer will also agree to permit financial institution and/or its affiliates to retrieve the vehicle on public and/or private property.  Customers personal data will kept confidential and only used for the purpose stated herein.

HOW IT WORKS:

Consumers will bring their required documents drivers license, title, proof of registration and proof of insurance to the dealership for any trade-in. The manufacturer factory rebate amount, at the time of purchase, will be applied to the purchase price of the new or used vehicle depending on the approved structured deal by the dealership.

Section 8:  Budget & Financial Projections

First Years’ Revenue Projection for Manufacturer Car Dealer Registration

*Figures provided by the National Automobile Dealers Association’s 2009 Dealer / Manufacturer Relations Yearbook.

First Years’ Revenue Projection for Independent Auto Dealer Registration

-          California's population is estimated by the US Census Bureau at 36,961,664 for the year 2009, making it the most populous state. [2]

Monthly Revenue Projection for Customers’ Service Fee

-          California is facing a $26.3 billion budget deficit for the 2009–2010 budget year. [3]

Total First Years’ Projected Revenue

First Years’ Revenue Projection for Entire U.S. Manufacturer Car Dealer Registration

Program Budget Expenses

 S.T.A.R.S PROGRAM DATA CHIP

With the S.T.A.R.S Program, we offer a great tracking device to help reduce your overall costs for consumers, financial institutions, and auto dealers, by lowering insurance rates, auto thefts and by minimizing loan risk for financial institutions. These devices practically eliminate your repo costs. Banks will know and have control of the exact location of your vehicle(s) at all times. You have the ability to disable the starter and pick up the vehicle.

These trackers are perfect for auto dealers and major auto manufacturers.

S.T.A.R.S PROGRAM Data Chip gives you state-of-the-art vehicle tracking, peace of mind and security.

More Features and Benefits of the Bullet.

• Daily Location Report
  

The Bullet GPS device will automatically report vehicle location once per day. This location update is stored in the vehicle history and does not deduct locates from a user's account.

• Stop Report
  

The Bullet monitors all stops made by a vehicle during a given time period. This information is collected in a report which can be downloaded and printed by users through our website.

• trakSMS™
  

Patented trakSMS™ feature allows users to communicate directly with their GPS unit using the text message function of any cell phone. Users receive the immediate address, speed and direction the unit is heading and are able to send additional commands to lock/unlock doors and disable/enable the starter.

• Warning Buzzer
  

Warning buzzer feature automatically alerts buyers within their vehicle that a payment is due soon. If the alert is ignored and payment is not made, the car can be disabled until the dealer determines to reset. This ensures prompt payments. (Optional Feature)

• Real-Time Alerts and Notifications
  

Customizable alerts set by the user allow users to receive a text message and/or e-mail notifying them when the unit is in motion, if it has left one of the six customizable geo-fences (which are invisible boundaries set by the user).

• State-of-the-Art Mapping and Imaging
  

The Bullet uses Google Earth to show unit location information in road map, aerial, hybrid (which is the aerial and road map views combined)

• Starter Enable/Disable
  

Owners can send a command to prevent the vehicle from being started at any time. This allows owners to regain control of their vehicle and prevent damage from happening. The vehicle will not disable while in motion.

• On-Demand Locating
  

This feature allows owners at any time to quickly and easily locate their vehicle by simply logging on to the website and pressing the 'Locate' button.

• OBDII Wiring Harness (Optional Feature)
  

This option allows users to perform a simple and fast install. By plugging the device wiring harness into the OBDII port on most of today's vehicles, this harness 'clones' the factory port.

Section 9:  FREQUENTLY ASKED QUESTIONS:

1. What is the Secure Transportation Assistance Redemption System?

The Secure Transportation Assistance Redemption System (STARS) is a $3 billion national program that helps consumers with low credit scores of 450-575 to buy or lease a more environmentally-friendly vehicle from a participating dealer when they buy a fuel-efficient car or truck. The program is designed to energize the economy, boost auto sales, and create jobs, put cleaner more fuel-efficient vehicles on the nation’s roadways similar to the Cash for clunkers Program.

1. Do I need to get a voucher or sign up for this program?
   
   

No. You do not need a voucher and you are not required to sign up or enroll in this program. Participating new or used car dealers will apply a credit, reducing the price you pay at the time of your purchase or lease, provided the vehicle you buy or lease and the vehicle you’re interested in meets the program requirements. The dealer will then apply factory or manufacturer rebates, incentives, and discounts that will be utilized as a down payment towards the vehicle, lowering the purchasing price to make it much easier for the financial institution to approve the loan.

1. How do I know if a dealer is participating in the program?
   
   

The law requires dealers to be registered to participate in the program.  As dealers are registered, we will list them on this website. Meanwhile, you may wish to contact dealers in your area to ask whether they plan to participate in the program. The STARS Act requires that dealers be licensed by their respective state for the sale of new or used automobiles in order for them to participate in the program.

1. What vehicle qualifies for the program?

All vehicles 2003 and newer with less than 70,000 miles qualify for the S.T.A.R.S Program.

1. How do I know if my credit score is eligible to qualify for the program?

There are several requirements your dealer can help you determine whether you have an eligible credit score by doing a standard credit check application. Consumer’s credit score must range from 450-575 and will automatically be approved for the program.

1. What happens if I change my mind about purchasing a vehicle from a certain dealer once I’m approved?

Approval is good for 30 days.  Any participating dealer can sell you a vehicle based upon your approval.

1. How much vehicle do I qualify for?

The amount of vehicle you qualify for is determined by the financial institution based on income and other qualifying factors.

1. What documentation will I need to bring to the dealer in order to participate in the program?

You should bring documentation establishing the identity of the person who is applying for the loan, proof of income, proof of residence within the United States and references.  For any trade-in, identity of the person who currently owns the trade-in vehicle, Current State Driver License, updated Proof of insurance, current registration of trade-in vehicle and title of the trade-in vehicle. If any, the final rule will specify what types of documentation would be acceptable.

1. Is the S.T.A.R.S Program mandatory or optional?

Participation in the S.T.A.R.S Program is absolutely optional.  Consumers still have the ability to choose between standard financing or secure financing through the S.T.A.R.S Program.  The S.T.A.R.S Program gives consumers with challenged credit an opportunity to be considered for an auto loan with traditional lenders. 

1.  When can I pick up the car?

Upon approval and receipt of all necessary documents (i.e. proof of income, etc.) the vehicle will be available for pick up at the time of purchase.

1.  Do you have an incentive program? 

Yes.  Customers participating in the S.T.A.R.S program who make their first 6 (six) consecutive car payments on time will receive $100 off the 7^th (seventh) month’s car payment.

1.  Does this lower my auto insurance premium?

Yes.  Most insurance companies offer lucrative discounts for vehicles equipped with anti-theft devices, GPS tracking devices, and monitoring services.

1.  Are vehicles available for lease under the S.T.A.R.S Program? 

Yes.  Lease programs vary by dealer.  Please contact a participating dealer for specific details on their lease programs.