By Steven Symes 
A growing problem is emerging in the US as car repos have hit their highest level since 2009, back when the country was in a recession. That’s sparking fears not only of a wider economic struggle but also of how this might impact the auto industry directly.
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After all, something has to happen with all those repossessed cars. Usually, lenders take a loss, the vehicles enter the wholesale market where they’re auctioned to dealers, then they arrive on lots for the next consumer.
During 2024, a total 1.73 million cars were repossessed, according to Cox Automotive data. That marked a 16 percent increase versus the total in 2023 and a 43 percent increase compared to 2022. Those are big increases and should be cause for concern.
Just as concerning, there’s been a 6.56 percent increase in subprime borrowers who are at least 60 days late on their vehicle loan. They’re running the risk of a vehicle repo in the near future.
While we can’t weigh in on the larger economic picture, this definitely means vehicle ownership has become unmanageable for many. The reasons for that are likely many.
With inflation increasing the price of just about everything, many Americans are getting squeezed financially. That has unfortunately resulted in them getting behind on car payments and other bills. Sometimes, the solution might be to trim back expenses.
Back during the pandemic, many people purchased vehicles which were beyond their normal means. They were receiving extra money from the government and some thought the party would never end. Plus, with the fear they might die at any time, some individuals decided to live it up.
Now they’re paying the piper, dealing with the consequences of their choices.
Another driving force could be employment struggles. Layoffs are becoming all too common, creating income disruptions for people who are already squeezed. And many who are laid off subsequently are taking big cuts in pay, putting them under even more financial stress.
Everyone can point fingers in different directions: consumers, lenders, dealerships, and automakers. The sad truth is the car repossession situation is likely going to get worse in 2025.
Source: Bloomberg
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