US car repossessions surge as auto loans strain budgets
US car repossessions are surging as auto loans and rates bite
US car repossessions surge as auto loans strain budgets
US car repossessions are surging as costly auto loans and higher interest rates squeeze households. Explore data, causes, and what it signals for the economy.
2025-09-26T12:15:03+03:00
2025-09-26T12:15:03+03:00
2025-09-26T12:15:03+03:00
The number of repossessed cars is surging in the United States. According to Motor1, storage lots are filling up with vehicles taken from owners over missed loan payments. A video from a dealer in Orlando shows dozens of almost-new cars—mostly Toyotas—with between 2,000 and 20,000 miles on the odometer. Many are family minivans bought on credit not long ago. The mix—practical family haulers rather than niche models—speaks volumes.The video’s author maintains that the main driver is buyers stretching beyond their means. Influenced by advertising and social media, customers sign expensive loans and, within months, fall behind on payments. The cars quickly end up on a holding lot and then go under the hammer at weekly auctions.Data from the Consumer Financial Protection Bureau (CFPB) backs up the trend: the share of auto loans sent to collections has surpassed pre-2019 crisis levels. In December 2022 alone, repossessions rose 22.5%, and in 2024 they added another 23% year over year.The average remaining balance after a repossession exceeds $11,000. Borrowing costs are climbing as well: according to Edmunds, the average rate on new auto loans in the U.S. has reached 11.5%, and for used cars it is 7.3%. More often, collections are handled not by banks directly but by third-party companies, which further inflates costs for borrowers.Analysts say this extends beyond the auto-loan market. A wave of repossessions can signal broader trouble for the U.S. economy: softer consumer demand and heavier household debt. It suggests even the middle class is finding today’s car prices and lending terms increasingly hard to manage. The scenes feel less like routine turnover and more like a snapshot of strained budgets.
US car repossessions, auto loans, higher interest rates, CFPB data, Edmunds rates, used car loans, auctions, household debt, middle class, economy, Toyota, minivans, Orlando dealer
2025
Michael Powers
news
US car repossessions are surging as auto loans and rates bite
US car repossessions are surging as costly auto loans and higher interest rates squeeze households. Explore data, causes, and what it signals for the economy.
Michael Powers, Editor
The number of repossessed cars is surging in the United States. According to Motor1, storage lots are filling up with vehicles taken from owners over missed loan payments. A video from a dealer in Orlando shows dozens of almost-new cars—mostly Toyotas—with between 2,000 and 20,000 miles on the odometer. Many are family minivans bought on credit not long ago. The mix—practical family haulers rather than niche models—speaks volumes.
The video’s author maintains that the main driver is buyers stretching beyond their means. Influenced by advertising and social media, customers sign expensive loans and, within months, fall behind on payments. The cars quickly end up on a holding lot and then go under the hammer at weekly auctions.
Data from the Consumer Financial Protection Bureau (CFPB) backs up the trend: the share of auto loans sent to collections has surpassed pre-2019 crisis levels. In December 2022 alone, repossessions rose 22.5%, and in 2024 they added another 23% year over year.
The average remaining balance after a repossession exceeds $11,000. Borrowing costs are climbing as well: according to Edmunds, the average rate on new auto loans in the U.S. has reached 11.5%, and for used cars it is 7.3%. More often, collections are handled not by banks directly but by third-party companies, which further inflates costs for borrowers.
Analysts say this extends beyond the auto-loan market. A wave of repossessions can signal broader trouble for the U.S. economy: softer consumer demand and heavier household debt. It suggests even the middle class is finding today’s car prices and lending terms increasingly hard to manage. The scenes feel less like routine turnover and more like a snapshot of strained budgets.
