Repossessions have risen to fifteen per cent as many people are struggling to keep up with their repayments on their car loan.
Cars are becoming increasingly expensive to run, with insurance, petrol and tax having all risen in price this year. As a consequence many are defaulting on their car loans resulting in their car being repossessed.
Repo-man John Anderson says “It’s easier for these people to say, ‘Here, take it.’ They can’t afford a car payment, insurance and paying high gas prices. I’d say 75 percent of them are losing their houses, everything. It’s just a big mess right now.”
Auction yards are seeing their forecourts rapidly fill up as thousands of cars are repossessed each week. Many consumers are forced to make the decision over whether to lose their car or their home as they cannot afford both.
Tom Kontos, executive vice president of Adesa, a national car auction firm, says “The unusually high amount of repossessions that we got at the beginning of the year seems to be a reflection of the spillover of mortgage resets, subprime and others, that caused some folks to default on their car loans.”
Defaults in car loans reached a record high in the last quarter of 2007. The 1.51 million repossessions last year was the biggest increase in over a decade, and that number is expected to increase again this year, up to 1.6 million. I’d say 75 percent of them are losing their houses, everything. It’s just a big mess right now.”