Recent bank reports show that the once hot car market is starting to crumble with a historic wave of repossessions coming in 2022 and 2023. Traditionally, car repossession rates are difficult to track because lenders don't make that information public. However, recent information has been leaking out of banks and it shows that a couple of troubling trends. First, subprime repossessions have double since 2020 to more than 11%. People will always blame the consumer for subprime repossessions but the reality is that lenders make the terms so difficult to pay, knowing that consumers are desperate for transportation, especially in Florida, that defaults on these loans are expected. Second. Even more troubling is the fact that prime credit car repossessions are double their historic average. This wave of prime loan repossessions flies in the face of the media narrative that American consumers are sitting on large savings to help them survive through difficult economic conditions. While the media and lenders will blame consumers for spending beyond their means, we can look simply to the extreme rise in prices as the number one factor leading to this wave of car repossessions. Prices are up more than 40% on average and the larger loans taken out by consumers to afford these cars are proving to be unsustainable.
While one might think that the wave of repossessions will lead to rising inventory of cars that will bring car prices back down, it probably will not work that way. The lenders repossessing these cars work with dealers to put them back on the market and sell them. However, the dealers will control inventory levels to make sure prices stay steady. This means that dealers will hold back these cars to make sure that demand out paces supply. Not quite the free market system.
If you're behind on your car and worried about a repossession remember that the lenders do not have to give you warning and can repossess your car after one missed payment. We have seen consumers get their cars repossessed within days after a missed payment. If you have had your car repossessed or are worried about a car repossession then call Florida Consumer Lawyers today. We have a great deal of experience in all matters related to car repossession and have sued numerous lenders for violations of consumer protection laws as a result of their repossessions.