Debt2Assets

When The Repo Man Cometh

In our current economic condition, much attention has been given to the housing market, and rightly so, but the automotive market is also making news. No, I’m not talking about a drop in the month-by-month U.S. sales totals, rather the trend towards increasing numbers of cars being repossessed every month.

If you thought that home foreclosures was the chief problem for some consumers, consider that automotive repossessions are one more sting some people are now facing.

Repos Up Another 10%

According to Thomas Webb, the chief economist for a unit of Atlanta-based Manheim, which sells cars to dealers worldwide, repossessions for 2008 are expected to rise to their highest levels in more than decade, representing a 10% increase over 2007. What’s more, the repossessions for 2007 were 10% higher than 2006. In all, more than 1.6 million cars are expected to be taken back this year.

Consumers Can’t Make Payments

True, consumers may shoulder the bulk of the blame as some have were enticed to buy more car than they could possibly afford and payment terms that were longer than average. Indeed, with the proliferation of 60-month and 72-month notes out there, some drivers are wearing out their wheels faster than they can pay them off.

Stay In Touch With Your Lender

If you find yourself in trouble, the best thing to do is notify your lender that you will be late with a payment. It doesn’t take long, usually 2 or 3 months of being behind in payments, before lenders take action.

Even though repos are filling up lots across the country, lenders are usually not hesitating to take action, especially if they believe that consumers aren’t being honest with them.

Tags: car lenders, car repossession, new cars, repo man, used cars