The Consumer Financial Protection Bureau published a report on auto repossession trends and consumer impact, finding that repossession activity at the end of 2022 exceeded pre-pandemic levels and that lenders increasingly relied on third-party “forwarders” to manage the repossession process, which generally increases consumer costs. The analysis draws on data from nine major auto lenders covering accounts with activity between 2018 and 2022. In December 2022, 0.75% of outstanding vehicle loans were assigned to repossession, up 22.5% from 0.61% in December 2019. Lenders’ use of forwarders rose from 31% in January 2018 to 66% in December 2022, with average repossession costs charged to consumers higher when a forwarder was used. The report also notes that borrowers frequently remain liable for substantial balances after a repossession and sale, with the average outstanding balance for consumers who still owed money after repossession exceeding USD 10,000 in December 2019 and rising to more than USD 11,000 by December 2022, within an auto loan market the CFPB puts at USD 1.64 trillion.
Consumer Financial Protection Bureau 2025-01-23
Consumer Financial Protection Bureau report finds auto repossession assignments rose above pre-pandemic levels and forwarder use reached 66% by end-2022
The Consumer Financial Protection Bureau reported that auto repossession activity at the end of 2022 surpassed pre-pandemic levels, with lenders increasingly using third-party forwarders, raising consumer costs. In December 2022, 0.75% of vehicle loans were assigned to repossession, a 22.5% increase from December 2019. Borrowers often remain liable for significant balances post-repossession, with the average outstanding balance rising from over USD 10,000 in 2019 to over USD 11,000 in 2022.