On January 23, 2025, the CFPB published a report showing that the rate of auto repossessions at the end of 2022 surpassed pre-pandemic levels. The CFPB also found that lenders were increasingly more likely to use third parties, called forwarders, to manage the repossession process.
In a statement, CFPB Director Rohit Chopra said the following:
“Supply chain shocks and higher interest rates drove up costs to purchase and finance a car. With outstanding auto loans exceeding a trillion dollars, it’s critical that borrowers can avoid the costly consequences of repossession.”
According to the CFPB, auto loans represent one of the largest sources of consumer credit outside of mortgage lending, with more than 100 million active auto finance accounts and $63 billion in new monthly originations as of April 2024. When vehicles are repossessed, consumers often lose their primary transportation to work, may be required to repay outstanding balances plus repossession fees, and may see additional negative impacts to their credit scores.
The CFPB’s Auto Repossession Trends and Consumer Impact report includes the following key findings:
Vehicles eligible for repossession exceeded pre-pandemic levels. In the month of December 2022, 0.75% of all outstanding vehicle loans were assigned to repossession – a 22.5% increase from December 2019 (0.61%).
Repossessions completed using forwarders had higher costs charged to borrowers. The use of third-party repossession forwarding companies by lenders rose from 31% in January 2018 to 66% in December 2022, resulting in higher average repossession costs for consumers.
Consumers still owed thousands after repossession. Even after a vehicle is repossessed and sold, consumers can still owe money. In December 2019, the average outstanding balance after repossession was over $10,000, and by December 2022, it had risen to more than $11,000.
Read the CFPB’s press release here.
The full report can be found here.