I know of a statute that restricts rental car companies from using GPS devices on their cars without adequate disclosure (CA Civ. Code § 1936(6)(o) (2002), but no restriction on car lenders. Check your finance agreement - it may include this, in which case you agreed to it. It may also be a contractual remedy you've agreed that they have in case their repossession rights are triggered because you failed to make the promised payments.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.