Automotive Repossessions Surge to 15-Year High: What’s Behind the Trend?

The number of automotive repossessions in the United States has surged to the highest level in 15 years, according to a report by Bloomberg News. Data from Cox Automotive revealed that around 1.73 million cars were seized by lenders in 2024, marking a 16% increase from the previous year and a 43% jump from two years earlier.

This spike in repossessions is attributed to Americans struggling to keep up with their monthly bills, largely due to steep interest rates and rising car prices. The report noted that the last time car repossessions were at this level was in 2009 during the aftermath of the financial crisis.

During the pandemic, car repossession numbers had decreased due to relief efforts for borrowers. However, as those measures ended and inflation rose, borrowers faced challenges in repaying auto loans, leading to the recent uptick in repossessions.

Furthermore, the number of subprime borrowers who were at least 60 days late on their loans reached a record high of 6.56% in January, according to Fitch Ratings. Additionally, the average vehicle loan rate rose to 10.16% in February, with the average monthly car payment amounting to $748.

The U.S. Consumer Financial Protection Bureau had previously warned about a surge in repossessions following the pandemic, and recent data suggests that access to credit may be tightening. The Federal Reserve Bank of New York’s Survey of Consumer Expectations Credit Access Survey revealed rising rejection rates across major credit products, with the perceived probability of rejection for auto loans hitting a record high in February.

Consumers’ concerns about higher prices have also led to an increase in long-term inflation expectations, with uncertainty prevailing in the market. As QED Investors partner Amias Gerety pointed out, consumers are showing hesitancy, especially when it comes to big-ticket purchases.
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