Driven into debt
These are busy times for the Repo Man. Growing numbers of car and truck owners are losing their vehicles as jobs become harder to find and many face higher mortgage payments on adjustable, subprime home loans, reports the Riverside Press-Enterprise. One auto auction company says that the repossessions it handles are up 15% from last year. Not helping matters is that many cars now come fully loaded -- with debt.
Many car owners decide they would rather keep their house than their vehicle, said Tom Kontos, who works for an auto auction company. "There are cases where people say the lesser of the two evils is [to default on] the car."
The number of repossessed autos has grown as Americans have taken on huge amounts of auto loans, in many cases combining unpaid car debt with a new car loan. The result: more than a quarter of cars traded in have "negative equity," or the debt exceeds the vehicle's value. An L.A. Times story last December by Ken Bensinger found that nearly 45% of consumer auto loans are written for longer than six years and the average loan amount has topped $30,000, up nearly 40% in the last decade.
Along with more jobs for repo men and women, the rise in car and truck repossession is also likely to trigger more demand for the On Time car device, says USA Today. Made by a Murietta company, the On Time flashes a light when a car payment is due. If the owner fails to make a payment, On Time won't let the car start.
-- Jesus Sanchez
Photo: Associated Press