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What's the second biggest purchase after a home? Most of the time, it's a car. And with so many people losing their homes, it's really no surprise that so many people are also losing their cars. Repossession companies are reporting record business -- so much so in fact that they are securing additional lots on which to store the delinquent goods.

It's estimated that this year will see a 10-percent rise in car repossessions, with 1.6 million vehicles expected to disappear from driveways and streets. It would be the second year of double-digit rises in repos. (And that doesn't count recreational vehicles like boats, which should suffer even higher rates of return.) And it appears no one has been spared -- repo men report taking back high-end trucks as well as luxury cars from gated communities.

The culprit, as in the housing debacle, has been claimed by some to be the generous auto loans given to those who perhaps should have got a bit less to spend. One repo man said it would have been worse if employment hadn't stayed relatively strong. That will be little comfort to banks like Wells Fargo that -- by itself -- wrote off $1 billion in bad loads last year.

[Source: USA Today]



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  • 30 Comments
      • 7 Years Ago
      So much info here.

      The Devil is in the Details!

      When you are at the dealer you see the beautiful machine. Your heart is pounding, the salesman tells you everything you want to hear(lying through his teeth).

      * THE FINE PRINT SHOULD BE ILLEGAL!!!

      The wording is written by lawyers for lawyers. Not for the average layman to understand.

      If the average consumer knew what a binding contract with those kinds of terms & conditions & risks CLEARLY EXPLAINED TO THEM, Im betting 96% of them would walk away!!!

      12 FONT MINIMUM should be mandatory by LAW!!!

      Populations are aging, if I can hardly read it, how can my ol' man read it & understand it?
      • 7 Years Ago

      "So that mean more cars in auctions... does anyone know where to find such auctions? Other people's dumb buy could be my next car :)" by rideandrome

      Reply by Steve G
      "Check your local newspaper. These auctions are generally held once a week or once a month depending. You can get a good deal if you do your research. If you REALLY know what you're doing you can make a pretty penny flipping these cars around."

      DON'T DO IT!!!!

      Most of these Auctions are total RIPS. PUBLIC AUCTIONS ARE THE BIGGEST RIP-OFF. I’ve heard Home Auctions are still offering the same loans that have made the mortgage crisis. Automotive Auctions are trying to set up people with high interest loans. JUST SUCKER TRAPS IN MY BOOK.
      If you want to get a vehicle from an auction her are my suggestions:

      1. Find trust worthy used car Dealer that will let you go with them to Real Dealer Auction wher you can get the best deals.

      2. If the above is not possible then try to see about getting a Dealer license so you can get to go to a Real Dealer Auction.

      3. If any of the above is not possible do research on vehicles interested in get Blue book Prices and look thru public auction inventory make sure you have a set price. DON'T GET CAUGHT UP IN THE BIDDING FRENZY.

      As to this statement "you can make a pretty penny flipping these cars around.” This is part of the reason we have this Mortgage Crisis. People thinking that they would be the next Donald F-ing Trump. Most people trying to flip; just drove up prices.

      Rant Over.
      • 7 Years Ago
      Life of a repo man is always intense.
      • 7 Years Ago
      "Ted Kennedy Is My Chauffer": You are absolutely right.

      "jg": While i agree that some level of government regulation is necessary, by and large, this mess was indeed created by the bar being lowered too low. I heard a statement from one of these people in trouble on the radio just yesterday. she said "..well, the bank said we could afford it and that the rate could adjust but it rarely happens...". Everyone with 10 minutes of knowledge should know that adjustable rate mortgages adjust EVERY year and that rates are just as likely to go up as down. Also, the fact that she said "..the bank said we could afford it..." is really telling. YOU should determine that you can afford it, not the bank. The bank says we could pay another $1500 a month if we wanted but I know we couldn't do that. Throwing the veil of "fairness" over lending practice is going to co$t all of u$, not just those who got in over their heads and should have known better.
      • 7 Years Ago
      We live in a very nice 1000 sq. ft. house, and drive a 96 Caravan, and a 97 Bonneville. I would like a new car and a new truck and a boat, and a motorbike, and a 4000 sq. ft. home, but I just can't afford it. My kids are in a private school, and not being raised by someone else when they are not at school. By the end of this year with the exception of our $60,000 mortgage we will be debt free. We give some money to charity, and try to help other when we can.
      3/4 of the world lives in poverty, and does not have enough food to eat. We in north america are all consumed with getting more, that we fail to be thankfull for what we already have.
      • 7 Years Ago
      Good stats. We're going to build next year, and we're keeping it around 1600-1700 square feet. We're looking at a bunch of techniques and materials for energy efficiency in a hot/humid climate zone. The Dept. of Energy has a thick manual of best building practices for different climates. There is an initial premium, but it should be recouped fairly quickly--especially if energy prices keep goin up. That's also why we're keeping it small!

      Now granted, I could live in a tent as long as I had a good shop building! Heck, I could live in the middle of a shop. My wife has another opinion on that.

      Too many folks have high falutin' ideas about what they Deserve. Seeing folks with six figure incomes crying about their unaffordable mortgages makes me sick.

      Live within your means. We were well into our thirties before we got serious and tracked spending and made a budget; I wish we had been smart earlier. But it makes all the difference in the world.
        • 7 Years Ago
        I just can't learn about that reply button! When will this be fixed for slow folks like me?
      • 7 Years Ago
      96% of home owners are having no trouble living within their means. 4% of home owners are morons who want to live a life beyond what they can afford. The government can set up all sorts of safety nets, courtesy of taxpayers' money, but you can't regulate behavior, or as Ron White says, 'you can't fix stupid'.

      In 1977, the government, in an effort to 'help' lower income people, pushed mortgage companies to lower their standards of eligibility. In 1994, this tactic was enhanced further, once again, in the name of 'helping' people. We are now paying the cost for this government 'help'.

      The government shouldn't manipulate a free market, as every time it does, it screws things up, ie; Jimmy Carter not only enacted the legislation that gave us the current lending fiasco, but also enacted price controls on gasoline which gave us gas prices of $3.21 a gallon (in constant dollars) back in 1981.

      People are raving about how the average person is paying $750 more per for gasoline than they did five years ago, but no one points out that the average person also keeps $2000 of their own money each year courtesy of lower taxes. $750 going to an oil company is bad, $2000 squandered by the government is good. At least my gas money gives me something tangible.

      Bottom line, not everyone is capable of owning a home. Some people are only capable of being renters. Excluding medical situations, people encounter financial trouble through their own poor behavior. End of story.
        • 7 Years Ago
        While I agree wholeheartedly with the first 2 paragraphs and won't argue the 3rd, you lose me with this "average person keeps $2k more after taxes" part. You're being taken in by the misdirection of our current administration, the more valid measure is how much the MEDIAN taxpayer's taxes were reduced, not the average. The reduction in taxes on millionaires really skews that average up, and that's a red herring in this particular context because the only reason a smart millionaire would finance a car is because the rate offered is less than what he's make on an investment of the money he's not paying up front.

        Yes, I pay less in taxes because of the tax cuts (I'm in the middle class) but it's not $2k, and I'm low in the "4th quintile" of income on the 2006 national stats.
      • 7 Years Ago

      This is not really a surprise. I mean, people with a discharged bankruptcy have EXPONENTIALLY better credit options for BOTH cars and homes, even as little as ONE year out, than do those with marginal to good credit but MIRED in debt (due to DTI ratios).

      So it's a vicious cycle. Buy car, car gets repoed, you owe some outstanding balance, you file for bankruptcy and then your credit options are open all over again. "Letting a car go" is not the threat to people it used to be back in the day. It's actually viewed as a viable option when they don't want the car anymore, especially when their credit is probably shot anyway.
      • 7 Years Ago
      "And it appears no one has been spared -- repo men report taking back high-end trucks as well as luxury cars from gated communities." "And that doesn't count recreational vehicles like boats, which should suffer even higher rates of return." Those "anybody with a pulse" folks may be the culprits but not the only ones.
        • 7 Years Ago
        In fact casual empiricism tells me that middle-income people are at LEAST as likely to get in over their heads, because even when credit requirements are pretty lax it is easier for them to borrow money for multiple vehicles/toys after they've bought their house than it is for lower-income folks. When I lived in the 'burbs I'd see people move into the big house in older vehicles, and within a couple of months new cars/trucks/SUVs would appear, and after the Boat Show there'd be the occasional new boat around on the weekends (couldn't have the boat outside the garage overnight per the HOA, doncha know!)

        The combination of a consumption culture (keeping up with the neighbors) and stupidly lax credit (loaning people more money than the new car is worth to pay off the amount they're upside down in the previous junker) has set careless people up for failure. Social Darwinism says let them fail. Never be upside down in your car loan, never be upside down in your home loan.
      • 7 Years Ago
      I agree.People who live beyond their means and then cry "predatory loan" are especially thick.
      • 7 Years Ago
      I use my credit card at every restaurant I go (not including fast food) because it's a lot easier to track (nice itemized bill) and safer to do that and pay the credit card bill off IN FULL every month than it is to carry around wads of cash that can be easily stolen.

      Or are you one of those people that automatically judges someone who uses a credit card as someone that is financially unstable?
      • 7 Years Ago
      Whether you personally can affort a house/car has absolutely no relevance on whether the dollar is dropping.

      The facts show that the dollar IS dropping and you'd be an idiot to think otherwise.
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