With inflation and interest rates still high, millions of Americans are feeling the pinch — and an increasing number are feeling it right in the driver’s seat.
According to Bloomberg, the number of car repossessions is growing in the U.S. In fact, they’re at a rate even higher than they were at the height of the Great Recession in 2009.
Data from Fitch Ratings quoted by the financial news service noted that in December 2022, the number of subprime car loanees who were at least two months late on their car payments rose to 5.67%. By comparison, that rate was just 2.58% in 2021 and 5.04% when the economy crashed in ’09.
This is bad news for cash-squeezed buyers, but good news for the repo folks.
Manheim, a company that puts repossessed cars on the auction block, noted an 11% increase in its incoming vehicles in 2022.
Unlike during the Great Recession, however, interest rates today are much higher, meaning those who just had an unwelcome meeting with a tow truck are finding it even more difficult to make their payments than someone who did back in 2009.
Making matters worse for their financial outlook is the fact that in most cases, getting your car repo’d also puts a serious dent in your credit rating — a mark that can take up to seven years for credit companies to forget, according to credit score company Experian.