DETROIT – As car repossessions rise across the country, Michigan’s Association of Repossession Agencies said businesses are seeing close to triple the numbers they were seeing before the pandemic.
According to J.D. Power, in December 2022, the average monthly financial payment for a car was around $718. That’s $47 more than in December 2021.
“For every one I pick up, they send me 10 more. It’s getting out of control,” said John Tsarkos, co-owner of Roseville’s Rockwood Recovery. “I can be out of there within 20-30 seconds.”
Although repossessing a vehicle will not take long, it can be a tough job.
“It can really pull on your heartstrings, you know, certain people in certain situations. It’s not their fault,” said Jenny Liagre, co-owner of Rockwood Recovery and president of Michigan’s Association of Repossessions Agencies.
Liagre said because a lot of people received unemployment money, it boosted their income to double or triple what they usually make, putting an increase on vehicles bought.
“By charging things to their credit cards right now, and they’re maxing themselves out, and it’s going to get to the point where they have to make a decision,” Liagre said. “You’re going to make your car payment. You’re going to make your house payment, and put food on the table.”
Sean Tucker, senior editor with Kelly Blue Book, said after a repossession, a vehicle is put up for auction.
“They tell us that right now, they’re seeing about 3% more repossessed cars than they did a year ago,” Tucker said. “Which sounds like an increase, but it’s still more than 25% less than it was before.”
Tucker said if you’re having trouble with your car payments, you should reach out to your lender before it gets to that point.
“They make more money off of working with you to restructure loans than they do offseason,” Tucker said. “So as long as you’re reaching out to them, there’s a very good chance that they will work with you on this.”
Tucker said there’s hope in the long run for car prices, as used car prices have started going down. He predicts new car prices will go down very soon.