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US car repossessions surge as more Americans default on auto loans

theguardian.com

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Re: US car repossessions surge as more Americans default on auto loans

#41

Post by dijit »

ifyoubuildit wrote: post #9
dijit wrote: post #2

It's an extremely inconvenient situation that Americans find themselves in, a sort of self-perpetuating cycle of car dependency that they reinforce because alternatives require far too much investment to make worthwhile. I'm really glad that I can live in a city without having to own a car if I don't want to. It makes a significant difference to my monthly expenses. And, honestly, it's a lot nicer and feels a lot mor…

I'm glad you have that opportunity too, but purely on the financials it's probably not so much of a win when you consider the heightened cost of everything (housing in particular) in a city, right?

I live in Malmö which is across the bridge from Copenhagen.

It's not comparable to the US in terms of Salary, but if I compare to the same size City in the UK (Coventry), it's not more expensive to live here than there. Coventry has a decent amount of car dependency for its size.

If we're comparing to a US City, I guess Orlando is pretty close (Orlando has a lower population than Malmö), but home prices are higher. However, there are only larger houses available making the comparison a bit squiff.

Re: US car repossessions surge as more Americans default on auto loans

#42

Post by gensym »

dijit wrote: post #2

It's an extremely inconvenient situation that Americans find themselves in, a sort of self-perpetuating cycle of car dependency that they reinforce because alternatives require far too much investment to make worthwhile. I'm really glad that I can live in a city without having to own a car if I don't want to. It makes a significant difference to my monthly expenses. And, honestly, it's a lot nicer and feels a lot mor…

It sucks that you need to own a car to get anywhere in most of the US. When my wife and I moved to Southern California from Chicago, we had a single car and tried to make that work for a while, but it was just not doable. We have a grocery store 2 miles away, but any other services are further than walking distance (and even the grocery store requires walking on the shoulder of a busy arterial road at a couple points. I used to bike everywhere in Chicago, but doing so here is too risky).

That said, the problems of car loans are far beyond that - From the article: " The average monthly repayment now stands at more than $750.". That's nuts! I make a solid upper middle-class income, and I can't imagine spending that much on car financing, regardless of the loan length. When we needed a second car, we bought a 6-year-old Volvo station wagon in good condition, it it's still serving us well. Many of my neighbors, who make about half what I do, think we're poor because of it.

Re: US car repossessions surge as more Americans default on auto loans

#43

Post by micromacrofoot »

Also worth noting the average new car is now $50k and the average new car loan is $40k+

https://www.washingtonpost.com/business/2025/10/17/50000-new...

Starting to find out the risks of a car-centric society in a slow-burn economic crisis.

Re: US car repossessions surge as more Americans default on auto loans

#44

Post by epistasis »

ifyoubuildit wrote: post #9
dijit wrote: post #2

It's an extremely inconvenient situation that Americans find themselves in, a sort of self-perpetuating cycle of car dependency that they reinforce because alternatives require far too much investment to make worthwhile. I'm really glad that I can live in a city without having to own a car if I don't want to. It makes a significant difference to my monthly expenses. And, honestly, it's a lot nicer and feels a lot mor…

I'm glad you have that opportunity too, but purely on the financials it's probably not so much of a win when you consider the heightened cost of everything (housing in particular) in a city, right?

Cities are artificially expensive becuase we ban them in nearly every location in the US, and ban new housing in cities.

It would have been an easy fix 10+ years ago, but as the housing crisis got worse and the working class was priced out, building got a lot more expensive and we have a huge labor crisis in addition to the regulatory crisis.

All solvable, but the political establishment and the political power base (homeowners and landlords) are dead set against solving it.

Re: US car repossessions surge as more Americans default on auto loans

#45

Post by SeanAnderson »

https://fred.stlouisfed.org/series/DRCLACBS consumer loan delinquencies up a lot in the last couple of years, tapered over the last year, low relative to historic norms

https://fred.stlouisfed.org/series/DRCCLACBS credit card delinquencies are similar

https://fred.stlouisfed.org/series/DRSFRMACBS home loans delinquencies look amazing right now, to the surprise of noone, since everyone is sitting happy having locked in their 3% rates a few years back.

My understanding is that Tricolor went under due to systemic fraud ("The core of the fraud allegations is that Tricolor illegally used the same loan portfolios as collateral for separate credit lines with multiple banks" to the tune of ~$200M)

First Brands also went under due to fraud ("First Brands had relied on billions of dollars in undisclosed debt, primarily from the private credit market, by borrowing against its invoices. This practice, known as factoring, kept the debt off the company's official balance sheet")

Yes, things feel tighter than they did in the years immediately post-Covid because there was a lot of free $ in the system, a lot of debt collections were paused, and Covid went on long enough for people to start treating that as the new normal when that was never going to be the case.

No, I don't see these as canaries for a 2008-esque event.

The scary thing to keep an eye on is commercial office space debt (e.g. https://finance.yahoo.com/quote/HPP/) which is likely to cause a cascade of fire sales as 5/10 yr debt obligations come due and how that will have cascading effects on commercial bank loans. That will be a hairy situation, but, fortunately, once it passes, rents in downtown areas will plummet and there will be a huge surge in growth in response to more favorable rents. Right now, commercial rents are locked into untenable rates because the loans are contingent on those rates which is resulting in 30%+ unused commercial space in areas like downtown SF.

Re: US car repossessions surge as more Americans default on auto loans

#46

Post by dijit »

rayiner wrote: post #30
dijit wrote: post #2

It's an extremely inconvenient situation that Americans find themselves in, a sort of self-perpetuating cycle of car dependency that they reinforce because alternatives require far too much investment to make worthwhile. I'm really glad that I can live in a city without having to own a car if I don't want to. It makes a significant difference to my monthly expenses. And, honestly, it's a lot nicer and feels a lot mor…

This is an extremely privileged viewpoint. Even in Tokyo, people in the bottom half of the income distribution do not live close enough to popular transit lines to be as mobile as someone with a beater car in Dallas. They spend a lot more time commuting (and they can’t “just do some work on the train” because they have real jobs). Even in Tokyo, their commutes are crowded, they’re subject to the weather. Being tied t…

It's only privileged because I'm living in a city that has actively prioritised other modes of transport.

I invite you to compare Orlando and Malmo.

If you have the opportunity to visit both, I would recommend it. They have the same population size (actually, Malmo has more people in it, but, close enough) yet in one it's impossible to get across the street without a car, even to go to the grocery store, and the other has entire portions of the city where cars aren't even able to go. -- Yet everyone manages to get around, and most people would consider it very convenient to do so.

Re: US car repossessions surge as more Americans default on auto loans

#47

Post by vkou »

dinobones wrote: post #31
harmmonica wrote: post #15

As if I need to make another comment about a, or multiple bubbles, but something has to give and here it's of course the consumer. New and used car prices are at all-time highs (nominal it sounds like, but tell that to someone whose wages haven't kept pace (i.e., almost everyone)). Housing prices are at all-time highs (in terms of price:income so no qualifier needed there). Tariffs are not being 100% eaten by the pro…

On paper, nothing will happen. The wealthy in America will continue to get wealthier. Real estate and stocks will soar in value. In reality, the dollar's true value will plummet. The FED is starting to lower interest rates again. We are likely going to undergo brutal inflation. Crashing the economy is obviously very politically unpopular. The left/right will do whatever they can to keep this charade up, even if it me…

> In reality, the dollar's true value will plummet.

It already has. It's down ~12% vs the EUR. It's even down 4% vs CAD, and Canada's on the front line of having its economy destroyed by Trumponomics. When the global markets have more confidence in the Canadian dollar than the American one, good luck...

Re: US car repossessions surge as more Americans default on auto loans

#49

Post by throwway120385 »

elmerfud wrote: post #25

One thing the article doesn't mention is deportees. The administration always says illegal immigrants but when you look the vast majority that are being deported are documented people here under some allowed process, they just haven't been granted a green card yet. Documented immigrants have work permits, social security cards, all the thing to find housing, get jobs, engage in banking etc... When they're picked up a…

> We were lied to about the number of illegals.

Remember this the next time someone starts trying to shit-stir about an invisible group of people here.

Re: US car repossessions surge as more Americans default on auto loans

#50

Post by oblio »

dijit wrote: post #7
bcrosby95 wrote: post #3

Earlier quoted context omitted.

For lots of America alternatives don't take that much investment. Creating a safe bike network would be relatively cheap and is feasible in large swaths of suburbs.

Due to the aforementioned car dependence: points of interest are further apart from each other than in other cities with solid cycling infrastructure (in Europe for example). Enormous car-lots several times larger than the buildings that they serve for example, sprawling 6-lane roads that take 20s to clear a junction on a slow moving bicycle, these things contribute to it being infeasible for more poeple. Connecting…

Bikes can reach remarkably far in flat areas if the infrastructure is there. And with a folding bike you only need 1 bus as a range extender to go really far. However lots of money is relying on both those things not happening.
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