The mortgage meltdown and the financial crisis on Wall St. is one of the biggest stories of the decade, but another serious problem is hitting automakers in very much the same way. All those real estate agents and mortgage brokers that reaped the rewards of the housing boom are losing their Bimmers and Lexuses because the money train flew off the tracks. Repos in the US are poised to hit the 1.9 million mark, which is 15% more than in 2007. Construction workers that ponied up big cash for an expensive truck or SUV are now searching for work, and they can't pay their monthly payments, much less the gas.

At first glance it would appear that automakers were doling out bad loans just like the banks, but that's not entirely true. The high amount of luxury vehicles being repo'd have gone up as well, and many of those buyers have very good credit scores. Automakers are losing big here, too. The average loss on a repo is about $10,000 at GM and Ford. Some repo men say they're actually struggling since Automakers are lowering payments on struggling loanees instead of retrieving the defaulted vehicle. And heavily discounted repos that hit dealers give customers one more incentive to bypass the new car lot. In all the record high rate of repossessions is just one more reason the auto market is in a nose dive.

[Source: Automotive News subs req'd]

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