Repossessions rising – Trend or just a blip

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Back in the beginning of July, the press took off with the click bait story that we were in the midst of a repossession explosion. Of course, the data suggested otherwise but still left cause for optimism in that there were indications that delinquency could be beginning to rise and they were returning to normal. But since early August, agents have been discussing with the press and on social media, increases in repossession assignments. So has the last 60 days of aging of delinquent auto loan portfolios matured in greater volume to the point of repossession?

Detroit

Back on August 11th, WXYZ television Detroit, interviewed Jenny Liagre, co-owner of Rockwood Recovery in Roseville and President of the Michigan Association of Repossession Agencies. Who, when asked if she was seeing an increase in repo assignment volume is quoted as saying;

“Absolutely. Absolutely. Everything seemed to change at the end of May around Memorial Day. We just did double what we normally would do for June and July,“

Jenny is also quoted as saying that Detroit has always had a high auto default rate, but now she’s seeing a rise in repossessions outside of Detroit.

Watch the TV Interview here!

Florida

Now, on September 1st, Spectrum News 9 out of Tampa had a similar conversation with Bill Ingram, owner of Florida Security and Recovery who stated that his is also seeing increases in repossession assignment activity.

Ingram is quoted as saying that on a busy day they used to repo about 10-12 cars. Now, that’s his average.

Watch the TV Interview here!

This daily recovery consistent with other statements that I’ve seen from agency owners, with one bragging about his agent having recovered 240 units last month. Talking to repossession managers, their repossession inventory rose last month, as did their 60-day and up (reportable) delinquency.

Delinquency rising?

So, we’re all kind of in the dark as far as how delinquency in Q3, 2022 is going. In fact, those numbers probably won’t be available until sometime in November. As I’d mentioned in The mythical repossession explosion, and the real data back in early August;

Q1 and Q2 of 2022, 30 day delinquency showed an increase of .54%. This is the largest one quarter increase in 30-day delinquency since Q2 of 2006, which was a year and a half before the official start of The Great Recession when delinquency had climbed at an average rate of .18% per quarter leading up to it.

While significant, even if it maintained a .54% quarterly growth average, it wouldn’t be until Q1 of 2023 until this delinquency point returned to pre-pandemic levels. In order to reach Great Recession levels, it wouldn’t get there until Q3 of 2024.

But a bright point did show itself in the 90-day delinquency bucket;

“Q1 showed the first increase in delinquency in this tranche since before the pandemic, it is Q2 that showed a spike. With a .20% increase, it is not the largest increase on record, but is significant in that it is the highest since the Great Recession and the two years leading up to it.

This spike would indicate that there had been in Q2 some increases in repossession activity. While the volume of this activity would be more resembling the 2011 to 2014 era.”

Is it happening?

Just today, I saw a post from one repossession agency owner on FaceBook claiming that they’d had a record shattering month and every response to it indicated a similar month. I’d heard many others post likewise encouraging statements on their volume, but is this just a summer delinquency blip or is this a trend? Rather than trusting the industry illiterate press or wait until November for Q3 data, I thought I’d ask all of you in a quick poll.