Auto Repossessions on the Horizon

As November auto loan data reveals, we are getting closer to a big wave of auto repossessions. The data shows a very notable jump in percent of Deep Subprime borrowers that are 60 days past due, reaching 8.2%. The trend is concerning for many reasons. It indicates that more and more people are unable to keep up with their car payments, which could lead to an increase in repossessions and defaults. This could have serious consequences for both individuals and the economy as a whole. For individuals, losing their car can be devastating as it often means they lose their primary form of transportation to work or school. It can also have long-term effects on credit scores and financial stability if the loan is not paid off in full after the repossession. On a larger scale, an increase in auto repossessions could mean less spending on cars, which would affect automakers and dealerships across the country. This could further weaken an already fragile economy that has been struggling since the start of the pandemic earlier this year. Fortunately, there are steps that can be taken to help prevent auto repossessions from becoming a reality for too many people. Those who find themselves unable to make their payments should reach out to lenders immediately to discuss payment options or other solutions before it’s too late. Additionally, government programs such as CARES Act stimulus checks may provide some relief for those struggling financially due to COVID-19 related issues such as job loss or reduced hours at work. Ultimately, it’s important for all of us to remain aware of what’s happening with auto loans so we can take action if necessary before it’s too late and we find ourselves facing a wave of auto repossessions nationwide.