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Car Repos Are Exploding. That’s a Bad Omen.
Barron's ^ | July 8, 2022 6:00 pm ET | By Lisa Beilfuss

Posted on 07/14/2022 10:44:15 AM PDT by Red Badger

The jobs report and minutes from the Federal Reserve’s June meeting were the economic highlights of the week, but they are, respectively, a lagging indicator and old news. This column instead digs into the auto market, where there is an underappreciated ticking time bomb. Lucky Lopez is a car dealer who has been in the business for about 20 years.

In recent meetings with bankers, where he bids on repossessed vehicles before they go to auction, he has noticed some common characteristics of the defaulted loans. Most of the loans on recently repossessed cars originated during 2020 and 2021, whereas origination dates are normally scattered because people fall on hard times at different times; loan-to-value ratios, or the amount financed relative to the value of the vehicle, are around 140%, versus a more normal 80%; and many of the loans were extended to buyers who had temporary pops in income during the pandemic.

Those monthly incomes fell—sometimes by half—as pandemic stimulus programs stopped, and now they look even worse on an inflation-adjusted basis and as the prices of basics in particular are climbing.


(Excerpt) Read more at barrons.com ...


TOPICS: Business/Economy; History; Society; Travel
KEYWORDS: 2022election; 2024election; anwr; bidenflation; carrepos; didyousearch; election2022; election2024; elonmusk; keystonexl; opec; repo; repos; shortage; tesla; vehiclerepos
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To: Red Badger

Fortunately, my used car (a 2016 Scion iM) is now full paid off and I recently got the title to the car. I could sell it right now for close to US$19,000.


21 posted on 07/14/2022 11:15:54 AM PDT by RayChuang88 (FairTax: America's Economic Cure)
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To: Yo-Yo

I guess the moral of the story is only buy what you can afford....


22 posted on 07/14/2022 11:19:09 AM PDT by Psalm 73 ("You'll never hear surf music again" - J. Hendrix)
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To: Red Badger
Which is most, repo cars or stolen cars?
23 posted on 07/14/2022 11:20:35 AM PDT by mountainlion (Live well for those that did not make it back.)
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To: ncfool
most leased cars and trucks now have a HIDDEN GPS system in them so that the lender can find and REPO the vehicle.

And likely they have the key fob codes as well so they can simply unlock them and drive them away. Don't even need a tow truck.

When we go to self-driving cars, they will just drive themselves back to the leasing company.

24 posted on 07/14/2022 11:21:06 AM PDT by SamAdams76 (3,515,464 users on Truth Social)
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To: AdmSmith; AnonymousConservative; Arthur Wildfire! March; Berosus; Bockscar; BraveMan; cardinal4; ...

https://www.politicsandbetting.com/wp-content/uploads/2019/05/laughing-joe-678x400.jpg


25 posted on 07/14/2022 11:22:23 AM PDT by SunkenCiv (Imagine an imaginary menagerie manager imagining managing an imaginary menagerie.)
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To: Red Badger
Mine has a chart, so there

Well, there's certainly no denying that.

A very charty chart indeed.

26 posted on 07/14/2022 11:26:27 AM PDT by humblegunner (Ain't drownin', Just wavin'...)
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To: TexasGator
You have it backwards. I suggest you to read the article.

I tried reading the full article, but I have to be a Barron's subscriber to see all of it.

Perhaps you have some insight?

My point being, and I don't think you can dispute this part, is that with used car prices exploding, the value of a used car is higher than normal and a finance company doesn't stand to lose any money by repossessing a vehicle and selling it on the wholesale market.

In past recessions, the value of used vehicles plummeted which meant that a repossession would more likely lose money for the finance company.

27 posted on 07/14/2022 11:27:17 AM PDT by Yo-Yo (Is the /Sarc tag really necessary? Pray for President Biden: Psalm 109:8)
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To: mountainlion

Stolen cars usually get parted out...................


28 posted on 07/14/2022 11:27:44 AM PDT by Red Badger (Homeless veterans camp in the streets while illegal aliens are put up in hotels.....................)
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To: Red Badger

29 posted on 07/14/2022 11:31:02 AM PDT by Impala64ssa (If a liar's pants really did catch on fire CBC, ABC, CNN and MSNBC would be more fun to watch)
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To: Red Badger

I didn’t sign in to read the article, but the average price of used cars could be higher because new cars are being repossessed lowering the average age of the used car market. I was always leery about buying a repossessed car because I wasn’t sure how well it had been maintained on oil changes.


30 posted on 07/14/2022 11:31:07 AM PDT by alternatives? (The only reason to have an army is to defend your borders.)
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To: Red Badger

And I forgot. Harry Dean Stanton too


31 posted on 07/14/2022 11:40:04 AM PDT by Track9 (You are far too inquisitive not to be seduced…)
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To: ncfool

“most leased cars and trucks now have a HIDDEN GPS system in them so that the lender can find and REPO the vehicle”

That should be used by the police to locate stolen cars.


32 posted on 07/14/2022 11:41:00 AM PDT by Brian Griffin
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To: Red Badger
Lucky Lopez is a car dealer who has been in the business for about 20 years.

I can just see his TV ad: "Feeling Lucky? Tell ya what I'm gonna do!"

33 posted on 07/14/2022 11:42:57 AM PDT by Migraine ( )
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To: Migraine


"Got no job? We don't care. Got a bad credit rating? We don't care. Got a prison record? We don't care. Don't expect to pay us? THAT'S when we care!"
34 posted on 07/14/2022 11:45:09 AM PDT by dfwgator (Endut! Hoch Hech!)
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To: Red Badger

They prevented landlords from evicting tenants. They plan to reimburse college tuition. They fired people for not being vaxxed. I wouldn’t be surprised if the next big thing they do to interfere with the free market is declare a “moratorium” on car repossessions.


35 posted on 07/14/2022 11:49:53 AM PDT by I want the USA back (Damn it! We need Trump! America First!)
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To: Red Badger

I see so many Rovers and Porsces and BMW suvs and Audis now. These people have bought waaay over their heads. Eff em. And the dealers too. Dealers are crooks. Every one. Eff em.


36 posted on 07/14/2022 11:57:27 AM PDT by Seruzawa ("The Political left is the Garden of Eden of incompetence" - Marx the Smarter (Groucho))
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To: Red Badger

We are waiting for the earth-shattering kaboom to buy a truck.


37 posted on 07/14/2022 11:59:10 AM PDT by AppyPappy (Biden told Al Roker "America is back". Unfortunately, he meant back to the 1970's)
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To: dfwgator

I miss Carson; thanks...


38 posted on 07/14/2022 12:00:34 PM PDT by Migraine ( )
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To: Impala64ssa

Repo man’s always intense.


39 posted on 07/14/2022 12:05:08 PM PDT by Disambiguator
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To: AppyPappy

You may be waiting a while.........


40 posted on 07/14/2022 12:05:59 PM PDT by Red Badger (Homeless veterans camp in the streets while illegal aliens are put up in hotels.....................)
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