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There’s trouble in our economic futures, or so most bits of financial data suggest. A recent report shows that the auto loans business shows the percentage of delinquent subprime auto loans increased to 5.3 percent, up from 2.6 percent two years ago. This bit of data has multiple logical implications. One of the first is that there are clearly a lot of Americans who were victims of the insane price increases on new and used cars over the past two years. The other is that the repo business is about to be booming. 

Repossessions are expected to go up.
A quad bike hangs from the crane of a tow truck | Ralf Hettler/picture alliance via Getty Images

The repo man is coming

According to Motor1, at this year’s North American Reposessors Summit conference in Orlando, Florida (I can only imagine this is the worst conference of all time), One of the major points of discussion was that the repo people were worried about having enough people to meet the upcoming demand they expect from the repo industry in the coming year(s). 

 “As the economy curves down, our industry curves up,” said Ben Deese, vice president at North Carolina-based Home Detective Co. 

When can the repo man come to get your vehicle?

If you are unfamiliar with the repossession industry, their main function is to find and repossess cars, trucks, motorcycles, boats, and any other vehicle in which the payments have been missed. In general, repossession doesn’t happen until the loan payments are 60 to 90 days late. However, in some states, your vehicle can be repossessed after only a single missed payment. 

Repoing a vehicle often requires a skilled tow truck driver because this task often has to be done quickly and quietly to avoid confrontation. This skilled job, paired with the expected increase in jobs, is what have the folks at the repo conference worried. Man, I hope I never write the phrase “repo conference” ever again. 

How many cars are expected to get repoed?

Cox Automotive reports that between 1.5 million-1.8 million vehicles get repossessed annually. That number took a big dip from 1.68 million in 2019 to 1.1 million in 2021 getting snatched. However, 2022 saw that number begin to rise again. 

The bigger issue is that, just like before the major financial crash of 2008, despite the increase in unpaid loans, lenders still seem eager to lend money for inflated cars. According to Motor1, what happens is these loans are then repackaged as bonds sold to big money types like hedge funds and investment firms. 

History is like a boomerang

We never seem to learn, despite the fact that we’ve been through this nightmare before, and not just the recent time. Repo agents have been around since the Great Depression. Ford and GM started offering car loans because no one could afford a car outright, and, in turn, Ford and GM hired goons to go get the cars when the poor factory workers couldn’t afford the payments because companies like Ford and GM paid so poorly. 

Not unlike back then, we are facing a car market with insanely high markups due to low production and high demand. Not only that, but external factors like inflation and global conflict continue to beat against the average American family like waves against the shore. These high prices, paired with outdated wages and increasing interest rates, are a recipe for disaster, and the repo industry is starting to show a more accurate temperature for the financial climate.