On Friday we noted that auto loan delinquencies among low-tier consumers have surged 50% since 2010, as new vehicle prices have spiked over 25% since 2019 and 20% of borrowers forking over at least $1,000 per month for their depreciating asset (at 9% APR, no less).
And so it makes perfect sense that with over 100 million auto loans in America, the number of cars being repossessed is approaching records.
According to data from the Recovery Database Network (RDN), there have been over 7.5 million repossession assignments in the United States so far this year – meaning, authorizations given to an agency to recover a vehicle on behalf of a lender. This figure is on track to exceed 10.5 million by the end of the year. Of note, an assignment =/= a repossession, as repo men aren’t always successful.
Yet despite recovery ratios having fallen in recent years, over three million cars could be repossessed this year, a level not seen since 2009.
Paycheck to Paycheck
According to a Goldman survey published earlier this month, around 40% of Americans under the age of boomer report living paycheck to paycheck as inflation continues to erode purchasing power.