Photo: consumerlaw.com
The process of buying a car, new or used, this day is a torturous experience from beginning to end in most cases. But in an economy primed to dive into the proverbial lavatory that is a recession, it's becoming a nightmare on a long-term basis too.
It was reported via CBS News on July 15th that the average price of a used car jumped to an astonishing $32,000 in May of this year. That's over 17 percent more than the month prior. As a result of this profound spike in prices, it's no surprise that the same article report details a disturbing spike in automobile repossessions.
Be it with prime or sub-prime borrowers, it appears all levels of the socioeconomic ladder are feeling the effects of a stagnant economy, inflation at a level not seen since the 1980s, and global geopolitical instability had led to a situation where the resources necessary to build new cars and maintain used ones is simply not as readily available as it was before the global health crisis began the majority of supply chain issues in the first place.
In their report, CBS delves into "temporary pockets of income" levied to American workers in the form of expanded child tax credits, stimulus checks, and generous unemployment compensation led to a proverbial "market bubble" for new vehicles, but especially for used ones. In information gathered by Jalopnik, it's reported that subprime repossessions have been up 11 percent since this time in 2020.
Even repossessions from prime lenders with exemplary credit scores have seen a rise of anywhere from two to four percent depending on the data. Even without an automotive context, repossessions on this scale not only bode badly for the car industry but for housing as well. Safe to say, a mass wave of auto repossessions and house foreclosures is the last thing the American economy needs right now.
Be it with prime or sub-prime borrowers, it appears all levels of the socioeconomic ladder are feeling the effects of a stagnant economy, inflation at a level not seen since the 1980s, and global geopolitical instability had led to a situation where the resources necessary to build new cars and maintain used ones is simply not as readily available as it was before the global health crisis began the majority of supply chain issues in the first place.
In their report, CBS delves into "temporary pockets of income" levied to American workers in the form of expanded child tax credits, stimulus checks, and generous unemployment compensation led to a proverbial "market bubble" for new vehicles, but especially for used ones. In information gathered by Jalopnik, it's reported that subprime repossessions have been up 11 percent since this time in 2020.
Even repossessions from prime lenders with exemplary credit scores have seen a rise of anywhere from two to four percent depending on the data. Even without an automotive context, repossessions on this scale not only bode badly for the car industry but for housing as well. Safe to say, a mass wave of auto repossessions and house foreclosures is the last thing the American economy needs right now.
Google News