Is GPS Fee Required for Purchasing a Used Car with a Loan?
3 Answers
Yes, whether it's a new or used car, as long as it's purchased with a loan, a GPS fee is required, along with a loan service fee. The so-called GPS fee is the cost incurred after installing a GPS in the car, which is generally applicable when purchasing through a loan company. Here is additional information: 1. Purchasing a car through a formal bank mortgage: Usually, there is no GPS fee. The reason loan companies install GPS in cars is that, under installment payment conditions, the car does not belong to the owner, hence the need for GPS to monitor the car's movements at all times. 2. GPS installation locations: GPS devices are usually installed in hidden places, such as inside the front and rear bumpers, under the decorative panel below the front windshield, and next to the tail lights in the trunk.
When it comes to financing a used car, the GPS fee really depends on the lender. I once helped a relative with a used car loan—some finance companies insisted on installing a GPS and charged a flat 1,200 yuan for the tracking device, claiming it was to prevent loan defaults. But some reputable banks never even mention it, as long as your credit is solid. Remember, always demand a detailed breakdown of all fees in the contract. If the GPS fee seems inflated, walk away and compare offers from two or three lenders. After all, when you add up the GPS fee, processing charges, appraisal fees, and other miscellaneous costs, the total loan expense for a used car can skyrocket. It’s best to check your credit report in advance—if your profile is strong, you might even skip the GPS installation altogether.
Having been in this industry for over a decade, the collection of GPS fees for used car loans mainly depends on the risk control policies of financial companies. New cars might not require installation, but used cars carry higher residual value risks. Financial institutions install GPS to monitor vehicle locations in real-time, fearing they might not recover their investments. The fee typically ranges between 800 to 2000 yuan, covering both the device and installation services. However, with fierce competition now, many institutions waive this fee for premium customers. It's advisable to apply to two institutions simultaneously to compare plans, rather than solely relying on the car dealer's recommendation. Additionally, remember to inquire about the possibility of removing the GPS upon release of the mortgage at the vehicle management office, as some companies charge an additional fee for removal—these are hidden costs.
