Auto Repossessions Hit Record High

[jga1980]

The Boston Globe reports, "more Americans, under growing economic pressure, are deciding to surrender their rides rather than the roofs over their heads: The rate of auto-loan defaults recently reached a 10-year high of 3.4 percent." With gas prices reaching all-time inflation-adjusted highs and the economy suffering a downturn, "consumers are looking to downsize to cheaper, more fuel-efficient models, and reduce their payments." Many can't sell vehicles they purchased in recent years because they owe more than the car is worth. As a result, defaults and repossessions are on the rise. "Nationwide, repossessions are up about 15 percent so far this year." Many analysts, however, warn that allowing your car to be repossessed often doesn't free buyers from their obligation. "They still may owe money if the lender sells the car for less than the balance owed. Moreover, the repossession typically stays on consumers' credit reports for up to seven years."

 

In an editorial, California's Whittier Daily News places blame for the crisis on some "auto lenders and financiers" who "made loans to people with questionable credit or with limited ability to pay." Attorney Alec Trueblood told the Daily News "Unscrupulous dealers who finance their own loans" sometimes "collect deposits and payments from people they know can't afford them -- that way, they can repossess the car and resell it over and over." He reports that he has seen dealerships "knowingly misstate a buyers' income -- either with or without the buyer's knowledge -- so the lender would accept the loan application."

[MarvBear]

On behalf of CreditBoards Admin, MarvBear would like to extend a sincere and warm welcome to the Automotive Forum. We have an Automotive FAQ (Frequently Asked Questions) section that should prove to be very helpful in your automotive knowledge quest.In the Reading and Resource Section of this forum, which is a read only forum, you can look up information regarding Sales Tax by State, Lemon Laws by State, along with a number of industry specific topics very relevant from the dealership's perspective.In the main section of this forum, there are two pinned topics both of which are read only topics. The first concerns Bank and Credit Union rates and tiers. You might find this useful in predicting an interest rate on your next vehicle purchase. The second is a general purpose credit application that you can use to get an idea if you might qualify for an automotive product loan based on an insider's perspective of the information you provide.You, as a consumer, have a unique advantage to "pick my brain"as I have been in the Automotive Industry since 1972. I will endeavor my utmost to give you up to the minute information and explain any insider workings you may question.Due to time constraints on my part, I may not always be available to answer your question right away. Don't be discouraged, this is a very busy board. If some extended time goes by without a reply, feel free to reply to your own post by typing the word *bump*. This will *bump* your post back up to the top of the forum where it is more easily seen.We make every effort to maintain a warm and friendly, and particularly non-judgmental attitude here on CreditBoards. If you find someone is discourteous to you, use the REPORT button located at the bottom of every post-that will ensure that either I or another moderator or Admin looks at the post and decides if it is against our TOS.Off-topic posts should go in the General Forum. And if you are a credit newbie, take a glance at our Newbies Section.Come get your new keys!HAPPY MOTORINGCB Admin: LKH, Pam, radi8, breezeCB Mods: cotterpin, CargoJon, CramitCCCA's, fla-tan, MarvBear, psp, pryan67, Forum Leads: TeeSharice, orangecrush, Four20Nik and Neen