Auto Loan Defaults and Car Repossessions Are Rising — Should Car Dealers Be Concerned?

First Up 08/05/22

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Through our Dealers Do Good campaign, AIADA is recognizing dealers for the positive impact they have in the communities they serve. If you’re a dealer doing good, let us know here, tag us on Facebook, LinkedIn, or Twitter, or join the conversation with the #DealersDoGood hashtag. When Hyundai of America was looking for a local charity to support, Mike Carroll, owner of Jack Carroll’s Skagit Hyundai suggested the Helping Hands food bank of Skagit County. HMA generously made a $10,000 donation, and Skagit Hyundai volunteered to match it with a $10,000 donation of their own. This is a great organization that provides food to more than 2,500 kids each week through their C.H.O.W program, delivers much needed food to people from Anacortes to the eastern side of the county up on Hwy 20, and provides a myriad of other services to people in need that they encounter daily. Click here to learn more about Helping Hands food bank.

Auto Loan Defaults and Car Repossessions Are Rising — Should Car Dealers Be Concerned?

Dealership owners are concerned as repossessions continue to increase. According to the Cox Automotive Industry Insights 2021 presentation, repossession in 2020 was the lowest in the last five years, but 2021 and 2022 saw increases in car repossessions, but the question is why? Due to the Fed’s ambitious approach to combating inflation, borrowing costs have gone up and are anticipated to reach 3.5 percent or more by year’s end. Lower-income households are being hit hardest by inflation, and many industry observers expect a sharp rise in auto loan defaults and vehicle repossessions, according to Cox Automotive Chief Economist Jonathan Smoke. CBT News reports even users with high credit scores in 2022 are experiencing car repossessions. According to a recent report, car repossessions have increased about 11 percent when compared to 2020. Another likely cause is increased sale prices for both new and used vehicles. New vehicle affordability hit a record low in June of this year as the average monthly payment for new cars increased to $730, according to new data from Cox Automotive. Click here for the full story.

Sinema Signs onto Dems' Party-Line Bill Ahead of Momentous Saturday Vote

Senate Democrats cleared a huge hurdle Thursday night by securing Kyrsten Sinema’s support for a modified signature climate, tax and health care proposal, and will move forward on the legislation on Saturday. Politico reports the Arizona Democratic centrist announced that she’s signed off on the legislation after winning tweaks that include the removal of a narrowed loophole for taxation of certain investment income, a provision known as carried interest. In a statement, Sinema said she’s also won changes that would “protect advanced manufacturing and boost our clean energy economy.” It was a big, early win for Majority Leader Chuck Schumer’s caucus, even as some of the bill’s specifics are still clouded in uncertainty. Schumer said in a statement Thursday night that “I believe” the party-line bill will get unanimous Democratic support and previewed the introduction of a final version on Saturday that will “put us one step closer to enacting this historic legislation into law.” He said it preserves “major” pieces of his earlier agreement with Sen. Joe Manchin (D-W.Va.). Click here for the full story.

Nissan to Kill Current Maxima in Mid-2023, Appears Primed for an Electrifying Return

The large, mainstream sedan segment is quickly turning into a ghost town as models such as the Buick LaCrosse, Chevrolet Impala, and Ford Taurus have all fallen by the wayside in the United States. While Toyota has already committed to replacing the Avalon with the 2023 Crown, Nissan has now confirmed the current Maxima will be phased out in mid-2023. In a short statement, the automaker told Carscoops the “Maxima is one of the most storied nameplates for Nissan in North America. Today we announced to our employees, suppliers and dealers that the current-generation Maxima will end production in the middle of 2023.” Nissan went on to say “As part of Nissan’s Ambition 2030 plan, the company is prioritizing electric vehicles and advanced technologies, and by 2030, 40 percent of Nissan vehicle sales will be fully electric, with more to be electrified. Additionally, earlier this year Nissan announced two all-new, all-electric models at the Canton assembly plant in Mississippi.” More interestingly, it appears the Maxima could eventually return. While that remains to be seen, the automaker said, “stay tuned for future Nissan Maxima news as we empower journeys through exciting vehicles and tech innovation.” Click here for the full story.

AAA Executive: Most Consumers Don't Want Self-Driving Vehicles

Greg Brannon's message to the auto industry is probably not what many technology suppliers want to hear these days. It's that the industry's race to fully automated driving is misguided, and most consumers don't want it. Brannon, director of automotive engineering and industry relations for the membership-based driver services organization AAA, brought his argument to the Center for Automotive Research's Management Briefing Seminars here this week, where automated driving is a hot topic. "There's just no business case for full autonomy for individual ownership," Brannon said during the event. "What we're trying to say is, let's do a better job of the safety technologies that people can go out and purchase today, the features they really want and are willing to pay for." Automotive News reports Brannon told the audience that his blunt view was not merely his own. A survey of AAA's 62 million members found that 77 percent of respondents said they wanted safer vehicles, but only 18 percent wanted a self-driving capability. "We have some sway with regulators," he said of AAA. "If we can raise the bar, it's a good thing for safety." Click here for the full story.

 

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