[There is a silver lining in that the weaker economy the auto trouble both reflects and portends should cool inflation. But it might not be that simple, at least not right away. “A lot of the banks—they’re smart. They control the market, like diamonds,” Lopez says. “As repos pour in, they only release them so often,” he says, meaning auto prices will probably remain stubborn even as economic growth wanes and more repos mean more used-car inventory.]
Another issue for banks that wasn’t such a big deal before? Crime. Now that progressive DA’s have all but decriminalized theft, storing repos has likely become an expensive proposition. That means big time security measures that require more staff as repo inventory piles up. That’s inventory that, if held on to, will have to be offset by continued high used car pricing. Every single day it sits in storage is another chunk of cost they’re counting on being able to defray. That’s a huge gamble, and not sustainable in a market that is tottering, to say the least.
Then, as chip production kinks are worked out, and new cars start piling up on car lots, and manufacturer incentives to move them out start to balloon, used car prices will whoosh down, triggering panicked dumping by the banks.
Great assessment on the matter.
The crooks only want to hack off the catalytic converters.
In Texas, creditors can’t stockpile repoed cars. The financier does not own the repoed car, but merely has a security interest that allows them to take possession of the car and sell it in a commercially reasonable manner.
Are there states where the financier just keeps the car, and has good title to it? In the absence of a commercially reasonable sale, I do not see how it may be determined if the buyer still owes the financier, because the car is worth less than the loan balance, or if the financier owes the buyer, because the car was worth more than the loan balance and cost of repo. (It happens — but not often.)