Auto Trends

Repo Man, originally uploaded by Walt Jabsco

Wow, what a surprise… Not!

This past 2008 saw an estimated 1.67 million vehicles repossessed from the sad owners who were unable to continue payments on their vehicle. That is approximately a 12 percent increase over last year, which was certainly no walk through the money fields either.

Why the huge increase in the number of repos?

Well, as obvious as the answer may seem (recession), there were a few other factors which  added to the number of victims this year. For one, once a vehicle rolled off the dealer lot, its name became worse than Mud, it became absolutely worthless Mud. In other words, there was such an overstock of new vehicles at slashed prices, once a vehicle left the lot, its value crashed and burned.

This added to the number of people who became upside down on their payments rather quickly. So, instead of selling their vehicle or making a trade-in on a vehicle with a lower monthly payment, many people had little choice but to wait for the repo man pay them a visit. Two, to make things worse, all the high-priced hybrids and gas sipping vehicles which were selling like hotcakes this past summer, have lost much of their original value since the return of $1.50 a gallon gas.

A third explanation is that a lot of folks just don’t care as much as previous years if their vehicle is taken away. A report from ConsumerAffairs.com claims that only half of the panic-induced economy car purchases this past summer were happy ones. The other half were left wanting more, more luxury, more room, more features, more options, and more horsepower. Today, as they watch the new luxury and performance models selling for similar prices as their baseline econo-boxes, that extra fuel economy has lost some of its glitter.

Prediction for 2009

Most experts are saying not to expect anything to get much better over the first half of 2009. It is estimated that there will be another 5 percent increase in the number of repos occurring from the month of January through June of 2009. Once we get that first half out of the way however, the mid-summer is expected to see a gradual decline in troubled consumers.

Gas prices are not going to stay at $1.50 forever, so the once coveted economy car will make a comeback eventually. To what degree we have no idea, but many manufactures are counting on them to, as they continue to look for new technologies (hybrid, electric, hydrogen) to satisfy the need for increased fuel economy and decreased emissions.

The best way to keep the repo man from gracing his dark shadow across your baby is to keep a reasonable budget in mind when shopping for a new car deal. Don’t take on more than you can chew. Just like the story of the Ant and the Grasshopper. Those who work and save will be better prepared than those who sing, play, and buy Bugatti Veyron’s and Maybach Exelero’s all winter long!