August 2022 Repo News

A few stories that have been published in the last weeks regarding the consumer repossession industry:

MarketWatch has a story regarding how auto purchases during the heights of COVID-19 are now leading to an increase in repos — especially by Buy-Here, Pay-Here type dealers. Of note, the story explains how these deals are designed and the built-in dangers with using these dealers:

“These car contracts are not for these borrowers to get a car,” Sanders said. “They are designed for a default.”

Also, there’s an upside for lenders not getting their monthly car payment, she said, because they “can get 25% of a paycheck” by garnishing a borrower’s wages, and then resell the vehicle to another borrower.

“It’s guaranteed easy-money.”

The story goes on the show how some consumers get deeper into financial trouble when the dead goes bad:

Lenders in Arkansas can pursue a borrower for up to five years on an outstanding balance left on their loans. “The lawsuits come with a lag,” Sanders said of the cases now rolling into her office.

While it has become common practice for lenders to roll over the unpaid balance of a previous loan into a new one, the “trade-in treadmill” leaves consumers deeper in unsustainable debt, Ed Mierzwinski, a senior director for the Federal Consumer Program at U.S. PIRG, told MarketWatch.

Another story on the inherent dangers of repos came out of San Diego where the SWAT team responded to a repo:

San Diego Police said a woman and a few others confronted the tow truck driver who was attempting to remove her vehicle near the intersection of Palm Avenue and Hollister Drive at about 1 a.m., according to NBC7 San Diego.

Finally, WXYZ out of Detroit describes the increase in auto repos:

“Absolutely. Absolutely. Everything seemed to change at the end of May around Memorial Day. We just did double what we normally would do for June and July,” Liagre said.

She points to the expiration of COVID-19 unemployment benefits last year and inflation.