Your gain, the repo man's pain

Vehicle repossessions have plunged by more than a third as frugal car buyers and a stronger economy help keep the tow trucks at bay.

By Jason Notte Mar 26, 2013 7:10AM
Tow truck (© Getty Images)Stop looking at jobless numbers, new-home sales, housing starts, auto sales and consumer spending for signs of an economic recovery.


If you really want to know how the nation's finances are faring, ask your local repo crews. While business was booming at the height of the recession in 2009, U.S. repossession specialists have spent less time pulling cars off streets and out of parking lots in the last year and more time fretting over their own jobs.


Auto repossessions peaked at 1.9 million nationwide in 2009, according to Manheim Auctions, as lessees and owners fell behind on payments. Last year, however, repossessions dropped to 1.3 million as auto companies like General Motors (GM -0.21%) tightened credit restrictions and car buyers scaled back. Likewise, the folks at Experian Automotive, the car branch of Experian's national credit reporting service, found that repossessions dropped by nearly a third during that span.


As CNNMoney reports, the increased frugality of the American car owner has brought tough times to the repo industry, which thrives on overleveraged owners unable to keep up with their high payments. Fleets of tow trucks are being cut nearly in half, and payment per repossession has dropped almost 25%. For some repo companies in the Northeast, business is down 66% or more.


And while U.S. car sales increased 13% in 2012, according to MotorIntelligence, reliable older cars are causing headaches for the repo man these days. Auto information company Polk says that since 2010, the average age of vehicles on U.S. roads has hovered around 11 years. Among cars alone, that's been the average age since about 2008, as uncertain Americans held on to their vehicles during tumultuous economic times.


At the same time, more Americans are shunning new vehicles altogether in favor of used car lots. Manheim's Used Vehicle Value Index is down from record highs set in 2011 and early 2012, but used car prices are still much higher than they were in 2010. Used car inventories are just starting to recover as government agencies and car rental companies strapped by the recession start spending on fleets again.


All this means the repo industry has fewer leased and financed vehicles to put on its flatbeds. Sure, some Americans are having an easier time making payments now that they're employed again and have swapped their luxury SUVs for sensible small or midsize cars. But fewer Americans worrying about car payments means a lot more repo agents worrying about their next paycheck.


More on moneyNOW

27Comments
Mar 26, 2013 1:08PM
avatar

You buy a vehicle..........pay for it

Feel sorry for the repo man?  Why?

He took the job.

Mar 26, 2013 4:27PM
avatar
Why should I stop looking at job market, home sales or anything else to judge the market? Because people are finally using common sense and not spending above their means. If only the Government would do the same.
Mar 26, 2013 3:39PM
avatar
None of these statistics include the dealers that finance all the customers that manufacturers such as GM have stopped financing.  Talk to the secondary financial institutions and Buy Here Pay Here dealers if you want to know the true story.  These repos don't show up on anyone's credit reports to go into the numbers in the above type articles.
avatar
Liberals are too busy feeling sorry for the idiots that put food, shelter and their families AFTER large panel tvs, luxury cars, drugs, dinner out and smart phone contracts!
Mar 26, 2013 5:58PM
avatar
Well, when they're unemployed and can't afford to pay for their car, they'll know how the reposessee's felt losing their transportation while unemployed...
Mar 26, 2013 4:31PM
avatar
I hope they lose their jobs and someone repo's them.
Mar 26, 2013 6:16PM
avatar
Pinhead you chose a great name as racist and bigotted comments like yours show just how pinheaded you really are lol.  The bottom feeders such as repo companies and debt buyers are having a tough time because people are at last only taking on debt they can afford.

 It will be interesting to see how many of them go bust over the next year or two as they finally realize that cowboy tactics and threats no longer work thanks to an educated public and lower personal debt levels!

Mar 26, 2013 3:19PM
avatar
All bottom feeders are having tough times
Mar 26, 2013 6:33PM
avatar
Stronger economy??? In what universe?????
Mar 26, 2013 2:13PM
avatar
Most black people buy new cars and trash them a month later and stop making payments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.

Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More

MSN MONEY'S