– Auto Insider Warns More Americans Fall Behind On Car Payments As Repos Soar 23%:
The delayed day of reckoning has arrived for millions of Americans who purchased vehicles with absurdly high monthly payments they no longer can afford. New data shows auto repossessions surged in the first half of the year, driven by elevated inflation and high interest rates, resulting in increased consumer distress (read: here & here) as the labor market slows.
Before we delve into the data from Cox Automotive, let’s revisit several of our reports from mid-2022, showing how we have been diligently tracking the perfect storm brewing for auto repossessions:
- July 2022: Are We Headed For An “Auto Loan Crisis” As Delinquencies Begin To Rise?
- December 2022: Perfect Storm Arrives: “Massive Wave” Of Car Repossessions And Loan Defaults To Trigger Auto Market Disaster, Cripple US Economy
- January 2023: “It’s The Perfect Storm”: More Americans Can’t Afford Their Car Payments Than During The Peak Of Financial Crisis
- November 2023: Americans Panic Search “Give Car Back” As Subprime Auto Loan Delinquency Erupts
- February 2024: “Garbage Deals”: Dealership Puts Customers In Cars With $3,000 Monthly Payments
Two years later, the deterioration has accelerated. Cox data shows repos jumped 23% in the first six months of this year compared with the same period in 2023. Repos started moving higher last year and have now exceeded pre-Covid levels, up 14% compared to the first half of 2019.
“When you think about the costs for rent and shelter and insurance, all those things hit consumers and they have to choose what they will pay,” Jeremy Robb, senior director of economic and industry insights at Cox, told Bloomberg.
Robb warned, “More people are getting behind on payments because everything is more expensive.”
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