As we approach 2023, we are seeing a rise in auto repossessions, which is a clear warning sign that we may be headed towards a rough economy. This trend is especially concerning because it indicates that the economy in 2023 may continue to deteriorate compared to 2022. There are several reasons for this trend, including rising unemployment, high inflation, and decreasing household savings.
The average monthly payment for a new car has also increased significantly since 2019, with many new car buyers spending more than $1000 per month on their vehicles. This can be a significant burden for individuals who are struggling to make ends meet, especially if they are also facing other financial challenges such as layoffs or rising living costs.
Lenders are also tightening credit and becoming more selective in their lending practices, which may contribute to the trend of increasing auto repossessions. This is especially concerning for individuals with lower incomes, as the rate of loan defaults for this group now exceeds 2019 levels.
Overall, the trend of increasing auto repossessions is a warning sign for the economy in 2023, and it is important for individuals to be aware of the potential economic challenges that may lie ahead. It may be helpful to have an emergency fund in place and to be proactive in seeking out strategies to mitigate financial challenges, such as finding ways to reduce expenses or increase income.
