Daily Auto News Car Repossessions Hit Record High; Auto Lenders Willing to Negotiate
Daily Auto News
Autoblog reports that automotive repossessions “are poised to hit the 1.9 million mark, which is 15% more than in 2007.” In a slowing economy, millions of Americans are falling behind on car payments. And while the housing bubble may have been based on aggressive lending to consumers with questionable credit scores, Autoblog thinks the same can’t be said of the automotive repossession spike. “At first glance it would appear that automakers were doling out bad loans just like the banks, but that’s not entirely true. The high amount of luxury vehicles being repo’d have gone up as well, and many of those buyers have very good credit scores,” they note.
Kicking Tires says “is bad news for automakers (as if they needed any more) because the average loss for a repossessed car is about $10,000. Then the heavily discounted repos wind up on dealer lots and give the few car customers still wandering around a great reason to bypass a new car in favor of a discounted repo.”
Those still struggling with high payments might want to try calling their lender and asking to renegotiate. Jalopnik notes, “Apparently banks and lenders are facing so many delinquent loans that they’re far more willing than usual to renegotiate the terms of a contact or tolerate missed payments than they used to be. Since lenders like GMAC and Ford Credit lose an average of more than $10,000 on repossession, they have a strong incentive to avoid the repo man – and apparently they’re doing just that.”
Tough times for automakers, though, have led to some great buying opportunities for consumers. Research the best car deals for October to take advantage while you can
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