Prepare For A Wave Of Car Repossessions - Financial Crisis Alert!

A growing number of drivers are falling behind on their car payments, car repossessions are also on the rise and financial analysts fear will continue, it is a sign reflective of soaring car prices and prolonged inflation having an effect on household budgets.

In recent months, the number of people behind on their car payments has been approaching new levels, and for the lowest-income consumers, the rate of loan defaults is now exceeding where it was in 2019, according to data from ratings agency Fitch.

Industry analysts worry the trend is only going to continue into 2024 with economists expecting unemployment to rise, inflation to remain relatively high, and household savings set to dwindle. At the same time, a growing number of consumers are having to stretch their budgets to afford a vehicle. The average monthly payment for a new car is up 26% since 2019 to $718 a month, and nearly one in six new car buyers are spending more than $1,000 a month on vehicles. Other costs associated with owning a car have also shot up, like insurance, gas and repairs.

These repossessions are occurring on people who could afford that $500 or $600 a month payment two years ago, but now everything else in their life is more expensive,” per Edmunds. “That’s where we’re starting to see the repossessions happen because it’s just everything else starting to pin you down.”

Getting your car repossessed is one of the most frustrating things to deal with as a driver. This typically happens when you default on your loan and stop making the payments. Once your car is repossessed, the lender will typically sell it at auction to recoup their money.

While it can be a tedious process, it's possible to get your vehicle back after a repossession. Just remember that you must act quickly. In this article, we'll explain how you can get your car back after a repossession so you don't lose the car you love or need.

The simplest way to get your repossessed vehicle back is to pay off the outstanding balance. Car repossession happens when you default on the loan, so you can get the car back by reinstating the loan.

Before you reach out to the repossession company, learn about the state laws around reclaiming items from a repossession company. It's not uncommon for these repossession companies to charge "storage fees" before they'll allow you to get your personal property back. In some cases, this is illegal, so make sure they're abiding by your state's regulations.

If any of your items have sustained damage, it's on the repossession company to cover the cost of it. In addition to items inside the vehicle, this includes property damage that occurred during the repossession process. For example, if the repo agent damaged your mailbox or garage door in the process of taking your vehicle, they are responsible for the cost of repairs.

The easiest way to deal with repossession is to prevent it from happening in the first place. Being proactive is the best way to keep your vehicle firmly in your possession and avoid hurting your credit.
If you're having trouble making your loan payments, reach out to your lender to see what kind of options they're willing to offer. Sometimes, lenders will give you a relief period to get your finances in order before having to make a car payment again. They might even modify your loan terms and put you on a new payment plan to better suit your current financial situation.

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