Wait . . . what? Car repos today are higher than the Great Depression?

Photo above - thinking of defending your car by force? Reconsider - today's tow truck drivers are strapped . . . (picture courtesy of Men in Black)

When I read the headline about record car repos, I thought - okay, there were fewer cars and people during the Great Depression. And the link (below, from Autoblog) doesn’t untangle this confusion. But then again, Autoblog's skill is educating us about 0 to 60 times, not repos and interest rates.

In any case, 1.7 million cars were repo’d in America last year. And another 2.3 million are in default, but the tow truck hasn’t arrived yet. Park indoors if you have a garage! Helpful tip, if you don’t have indoor parking: banks are forbidden to repo cars from government lots. Park your whip at work, early and often. But most civil servants are well paid, and layoffs have barely begun. I can’t imagine my neighborhood teacher or police officer is behind on their SUV payments . ..

Well, they might be. The average interest rate is 7% for new cars. That means as many are paying more than 7% as paying less (I’m paying 3.99%). The average used car interest rate is 12%. Again . . . half of these will be over this. There are no statistics on how many people are paying 20-24%. But I feel this is a non-zero number.

The interest rate isn’t what’s leading to repo’s. It’s the monthly payment amount. Now approaching $700 on average. And a record number of car loans had payments greater than $1,000 last year. Autoblog – take a bow. You have completed your mission: convinced people they need a $60,000 EV or a $70,000 pickup truck, with no money down. Or a sports car. There’s a guy in my apartment building who drives a new Jaguar. Hey, moron . . . you’re a frickin’ renter. And possibly paying alimony and child support too.

So we’re at a fork in the road now. Normally, record repo rates would lead to a surge in used cars towed, detailed, and flipped for resale. Price goes down as supply goes up. But on the other hand the new 25% car tax (if it’s not suspended again via Trump’s "Penn and Teller" tariff sleight of hand) will send shoppers onto the used car lots. And into the 12%+ interest rate zone.

If all this is coming as a surprise to anyone, please pinch yourself. Exactly what did anyone think was going to happen when Fed rate hikes drove mortgages to 7%, and car rates even higher? That nobody was going to default, and there’d be no repo’s or evictions? A "cooling economy" means more people on foot, and more furniture on the sidewalk, Chairman Powell . . .

Trump (last week) said: “I couldn’t care less how high car prices go.” He should have told us this during his presidential campaign. And Kamala Harris could have countered: “I have no plans to persuade the Fed to reduce interest rates”. That would must-see TV, if it had come up during the presidential debates, no?

I’m just sayin’ . . .

Car Repossessions Reach Shocking Levels as Loan Defaults Exceed Levels During Great Recession

Reader survey – disclose your interest rate, monthly payment, and car make in replies below. I’m paying $409 a month at 3.9% for a 2025 Honda Civic. How about you?