Increase In Car Repos Harbinger Of Worsening Economy

The number of vehicle repossessions declined during the pandemic, when Americans were flush with cash and creditors were more lenient with delinquent customers. But the numbers are now nearing pre-pandemic levels, which is raising concerns about the trends continuing amid high inflation.

  • Vehicles are repossessed by banks when the customer defaults on the loan, typically when payments are three months late.
  • For the lowest-income consumers, the rate of loan defaults is now exceeding its 2019 number, according to data from ratings agency Fitch.
  • The average monthly payment for a new car has increased 26% since 2019 – to $718 a month.
  • Associated vehicle costs including insurance, gas and repairs also have increased.