Car Repos on the Rise

[Bobby57]

Car repossessions are on the rise in 2022. With an already inflated used car market, the influx of used vehicles may caused a sudden drop in used car prices. What do y'all think?

There is one possible scenario that could help to support used car values, this being where auto manufacturers make a very drastic switch to manufacturing EVs with the market continuing to resist them. If, with this, the gas prices were to remain “affordable“ and the government were to keep its hands off the market, there would consequently be a strong demand for late model ICE automobiles?

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[RagmopInKona]

Repo's are a small %, The # of vehicles that got totaled in Florida a few weeks ago will balance any extra stock from repo's. hitting lots for resale.

 

[Trap]

There is one possible scenario that could help to support used car values, this being where auto manufacturers make a very drastic switch to manufacturing EVs with the market continuing to resist them. If, with this, the gas prices were to remain “affordable“ and the government were to keep its hands off the market, there would consequently be a strong demand for late model ICE automobiles?

I think you will find that the price of gas will increase quite a bit as EV vehicles are being pushed into the market to help people make the decision to switch.

 

[wynand32]

I think you will find that the price of gas will increase quite a bit as EV vehicles are being pushed into the market to help people make the decision to switch.

We're already seeing it, particularly in places like California. There's a concerted effort to make fossil fuels more expensive/less viable, and it's causing serious problems around the world. Right when we need cheap energy the most, it will be unavailable. Scares me to death sometimes.

 

[ay1820]

Repo's are a small %, The # of vehicles that got totaled in Florida a few weeks ago will balance any extra stock from repo's. hitting lots for resale.

I tend to agree that the volume of repos will not make a big difference in and of itself. However, it may be a bit of a barometer to the overall state of the auto market. A significant uptick in repos indicating more people having a harder time paying off loans may also indicate that there will be even fewer people willing to take on new loans translating into less cars being sold. I have not seen any data to actually confirm this hypotheses though.

 

[TeeLew]

You can’t compare the real estate market of mid/late 2000 to what it is now
Couple of examples:
Was a lot of no income verification loans, that doesn’t exist anymore
We now have a significant housing shortage
Subprime mortgages are only a fraction of what they were
Agree that the market is cooling down and we could even see a decrease in pricing but it will be very modest, nothing compared to 2008

I'll bet you a dollar it's a hell of a lot more than "very modest."

 

[Mspider]

I think you will find that the price of gas will increase quite a bit as EV vehicles are being pushed into the market to help people make the decision to switch.

Its really going to be a bait and switch type of situation though. We are moving to electric cars because they CAN be more environmental friendly if done correctly. Electricity being so much cheaper is just a short term byproduct. Eventually in time I expect the price of electricity to go up.

Everyone always talks about greedy oil companies, but its hard to imagine the power electricity providers will have around the world.

 

[wynand32]

Its really going to be a bait and switch type of situation though. We are moving to electric cars because they CAN be more environmental friendly if done correctly. Electricity being so much cheaper is just a short term byproduct. Eventually in time I expect the price of electricity to go up.

Everyone always talks about greedy oil companies, but its hard to imagine the power electricity providers will have around the world.

The only reason electricity appears to be less expensive (if/where it actually is) is because it's government subsidized and the price of fossil fuels has been artificially inflated through regulation and other policies. And the only way that EVs will be better for the environment is if 1) they come up with new battery technology that has less environmental impact in its manufacture and disposal and 2) if we were to adapt nuclear power as a default (and/or nuclear fusion becomes viable). As it is, other alternative energy sources (e.g., solar and wind) simply won't work at the scales involved, meaning the only way to power the grid to accommodate more EVs is through fossil fuels.

 

[AvalancheSVT]

I tend to agree that the volume of repos will not make a big difference in and of itself. However, it may be a bit of a barometer to the overall state of the auto market. A significant uptick in repos indicating more people having a harder time paying off loans may also indicate that there will be even fewer people willing to take on new loans translating into less cars being sold. I have not seen any data to actually confirm this hypotheses though.

repos directly impact used sales as those repos must then be auctioned off or sold at super low prices. the more we see this happen the lower it will bring the rest of the market.

 

[Mspider]

The only reason electricity appears to be less expensive (if/where it actually is) is because it's government subsidized and the price of fossil fuels has been artificially inflated through regulation and other policies. And the only way that EVs will be better for the environment is if 1) they come up with new battery technology that has less environmental impact in its manufacture and disposal and 2) if we were to adapt nuclear power as a default (and/or nuclear fusion becomes viable). As it is, other alternative energy sources (e.g., solar and wind) simply won't work at the scales involved, meaning the only way to power the grid to accommodate more EVs is through fossil fuels.

I have always thought nuclear power is the answer, even with the risks involved.

 

[wynand32]

I have always thought nuclear power is the answer, even with the risks involved.

I'm pretty convinced the risks are lower than with other energy sources, and there's no doubt about nuclear's efficiency. Anybody who professes a concern about carbon emissions and doesn't support nuclear power, IMO, is either ignorant or dishonest.

 

[Joe B.]

I think you will find that the price of gas will increase quite a bit as EV vehicles are being pushed into the market to help people make the decision to switch.

Same thing happening with natural gas here in Chicagoland anyway where gas is king for home heating. They are saying that the years behind schedule, way over budget gas distribution rebuild likely won't be as extensive as it was supposed to be, because "we'll be switching to electric for heat anyway". WTF. I don't see used car prices dropping unless the govt. makes them impossible to own.

 

[Marty1000]

Given the global supply chain issues, the economy and energy prices, the war in Ukraine, crazy weather around the globe and many other TBD factors (China vs Taiwan war?) that most of us can not control
do we truly thing that Repos will have impact on the car market prices? I say if so, they will be minimal if any. Build to order and MSRPs with ADMs are here to stay as the the new normal. As long as there is demand higher then supply it is win for the manufacturer and the dealer.

 

[RagmopInKona]

I tend to agree that the volume of repos will not make a big difference in and of itself. However, it may be a bit of a barometer to the overall state of the auto market. A significant uptick in repos indicating more people having a harder time paying off loans may also indicate that there will be even fewer people willing to take on new loans translating into less cars being sold. I have not seen any data to actually confirm this hypotheses though.

Maybe, maybe not. The fact that so many went looking for a new to them vehicle while sitting at home with no idea if they still have a job. Tells me , many buy things when they want it and throw caution into the wind.

 

[sk47]

Hello; Many years ago before my father died a coworker talked him into cosigning a loan on a new Camaro. Two main points in the story. First being the coworker never made car payment number one. I never talked to the guy so cannot say what he had in mind. At the time I was living 350 miles away and only heard the story later.
I did have to get involved in going to my father's bank with him and getting the direct withdraws from his account stopped. In the end my father lost a lot of money and never once drove the car.
The whole incident was troublesome for me in a number of ways.

What is known is the coworker got to drive a new car on someone else's dime for a time. I can only figure he knew exactly what he was doing from the get go. Something along the line my father deserved what he got for being dumb enough to agree to the deal. Maybe along the lines of a thief describing how the victim deserved being attacked and robbed because the victim walked in the wrong place or time of day.

Give people extra monies as happened during the covid lockdown fiasco and they will and did plunk down down-payments or sign one dollar down loans with no expectation of being able to make payments. There is no logical answer such as they misjudged or made a mistake.
I do not understand the thinking behind those who quickly paid way over MSRP on new cars the way they did. AS we all saw some prices were outrageous. In some cases, many tens of thousands over MSRP. Do they realistically expect the high price they paid to hold when they want to sell or trade. Saw a blurb about Carvana failure today but have not read the story. Does it mean their bubble has burst?

For a time, things were knocked out of kilter with the Covid actions and lockdowns. People sent home and then getting supplement checks greater than their working salary. Supply lines disrupted with a shortage of some new vehicles. So, people with extra money got into a bidding fight over reduced inventory with other people's money. ( NOTE- the extra monies some got was not actually free. Most was put on the national debt credit card. we and our children, grandchildren and their grandchildren will be paying. Saw where each USA citizen owes around $90,000 or so of the national debt. I think that includes babies and small children.)

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