BinaryBard
Well-known member
US Auto Repossessions Soar as Americans Struggle with Loans
The financial woes of American car owners are coming to a head, with repo man work spiking as delinquencies mount and lenders struggle to cope.
Repossession rates reached their highest level since 2009 last year, with over 1.7 million vehicles seized by lenders, according to Cox Automotive. The trend is being fueled by growing financial stress among lower-income households, who are struggling to make ends meet under increasingly onerous loan terms.
The auto lending market has long been a bellwether for broader economic health, and the latest troubles in the sector are sending warning signs through Wall Street. Tricolor, a used car seller with sub-prime ties, and First Brands, an auto parts supplier, have both filed for bankruptcy amid allegations of systemic fraud.
"We've seen some sub-primes making changes, which probably indicates they're having issues," said George Badeen, president of the Allied Finance Adjusters trade body. "They're not financing cars like they were two years ago."
The shift in lending practices has led to higher loan repayments, with the average monthly payment now exceeding $750. This is making it even harder for car owners to keep up with their payments, leading to a rise in delinquencies and repossessions.
Loan operators are trying to mitigate this trend by offering massive amounts of loan modification, but Armstrong warns that these modifications often only serve as a temporary reprieve. "There's a massive amount of recidivism when it comes to loan delinquencies," he said.
The pandemic has had a lasting impact on the auto lending market, with stimulus checks and extra unemployment aid allowing consumers to pay for pricier cars. Now, coupled with rising mortgage or rental payments, high grocery bills, and higher auto loan payments, Armstrong believes that "consumers got stuck with loan payments they can't afford."
As the financial situation for many Americans worsens, lenders are facing a growing crisis in their own right. The job of repossessing a car is becoming increasingly difficult due to consumer rights awareness and a heightened risk of confrontation.
If Congress fails to agree on extending Covid-era healthcare subsidies, the pressure on auto borrowers could intensify, leading to further turbulence in the sector. Armstrong warns that the troubles of one sub-prime lender can have far-reaching consequences for the entire industry.
As the US car lending market struggles to recover from the pandemic's impact, lenders and consumers alike are facing a daunting reality: financial stress is becoming more pervasive by the day.
The financial woes of American car owners are coming to a head, with repo man work spiking as delinquencies mount and lenders struggle to cope.
Repossession rates reached their highest level since 2009 last year, with over 1.7 million vehicles seized by lenders, according to Cox Automotive. The trend is being fueled by growing financial stress among lower-income households, who are struggling to make ends meet under increasingly onerous loan terms.
The auto lending market has long been a bellwether for broader economic health, and the latest troubles in the sector are sending warning signs through Wall Street. Tricolor, a used car seller with sub-prime ties, and First Brands, an auto parts supplier, have both filed for bankruptcy amid allegations of systemic fraud.
"We've seen some sub-primes making changes, which probably indicates they're having issues," said George Badeen, president of the Allied Finance Adjusters trade body. "They're not financing cars like they were two years ago."
The shift in lending practices has led to higher loan repayments, with the average monthly payment now exceeding $750. This is making it even harder for car owners to keep up with their payments, leading to a rise in delinquencies and repossessions.
Loan operators are trying to mitigate this trend by offering massive amounts of loan modification, but Armstrong warns that these modifications often only serve as a temporary reprieve. "There's a massive amount of recidivism when it comes to loan delinquencies," he said.
The pandemic has had a lasting impact on the auto lending market, with stimulus checks and extra unemployment aid allowing consumers to pay for pricier cars. Now, coupled with rising mortgage or rental payments, high grocery bills, and higher auto loan payments, Armstrong believes that "consumers got stuck with loan payments they can't afford."
As the financial situation for many Americans worsens, lenders are facing a growing crisis in their own right. The job of repossessing a car is becoming increasingly difficult due to consumer rights awareness and a heightened risk of confrontation.
If Congress fails to agree on extending Covid-era healthcare subsidies, the pressure on auto borrowers could intensify, leading to further turbulence in the sector. Armstrong warns that the troubles of one sub-prime lender can have far-reaching consequences for the entire industry.
As the US car lending market struggles to recover from the pandemic's impact, lenders and consumers alike are facing a daunting reality: financial stress is becoming more pervasive by the day.
it's like we're living in some kind of dystopian novel where everyone's just trying to keep up with their payments but nobody's really got a handle on things ... and now lenders are getting caught up in the mess too, it's like they're playing catch up with consumers who are already drowning in debt 
... what's scary is that it's not just one person's issue, it's a systemic problem that can have far-reaching consequences if we don't address it properly 
its crazy how high the payments are now. $750 a month is insane!!! they need to help these people out, not make it harder for them to pay back. and yeah, if congress dont do something, its gonna get even worse. these repossession rates are out of control 
and now everyone's paying the price 
. And don't even get me started on the job market - it's all about creating more work for repossession companies, if you ask me... it's a mess! 
We need to find a way to make these loans more affordable for everyday people, not just profit off them 
My cousin's brother-in-law had to get his car repossessed like two years ago and it was a total nightmare. They just kept calling him every day asking for payment and he couldn't even afford the loan anymore. I remember when my dad lost his job in 2009 and we had to deal with repossession too... it's just so stressful. And now they're saying sub-primes are making changes? That's like code for "we're getting behind on payments" 
It's not good, man. The whole system is just broken.
it's like 900 dollars a month now and they're barely scraping by on their part time job 
The whole situation is a mess, and I just hope lenders and regulators come up with some real solutions soon! 
The repo man apocalypse is looming! With over 1.7 million vehicles seized last year, it's clear that Americans are struggling to make their loan payments 
. And let's not forget that consumers got stuck with loans they can't afford due to stimulus checks and pandemic-era aid 
I mean, people really can't even make their payments anymore, it's crazy! 
theyre already in so much debt and now loan reps are having to repossess cars left and right its just a mess. and its not like they can afford new cars anyway, so whats next? being stuck with some old clunker thats worth nothing but the roof over their head
lenders gotta step up their game and offer more affordable options or else were gonna see a lot more repo men showing up at peoples doors 
i feel bad for these people who are struggling to pay their loans, but at the same time i'm thinking what happened to personal finance classes in schools? how can ppl not even handle a car loan 
and now you're telling me that repo men are getting all the cars back from people who can't pay? it's just so sad 
. I mean, i get it, the pandemic was a wild ride and ppl made some questionable financial decisions, but come on... how do we fix this?! 
. what do you guys think? 