Repossessions are caused by unpaid vehicle loans, and the statistics support this. Repossessions rose by 11% in 2018, according to auction house Manheim, although it's crucial to note that those figures were still far lower than they had been only a few years before. Early in the pandemic, fewer vehicles were being repossessed because stimulus payments helped many Americans survive financially challenging circumstances.
Unfortunately, a car repossession can lead to a host of additional difficulties in a person's life, and the rising number of repos can be problematic for the economy. Losing a vehicle results in considerable harm to a person's credit record in addition to a lack of access to services like food and healthcare as well as transportation to and from work.
The fact that Americans are paying more than $42,000 on average for new cars contributes to this problem. Even a new car with a moderate price tag may have an absurdly high monthly payment due to the rising cost of loans and interest rates.
