The United States is witnessing a significant increase in automobile repossessions, comparable to the peak levels experienced during the Great Recession of 2008 and 2009. This surge reflects growing difficulties among American car owners to keep pace with increasingly unaffordable car payments amid rising vehicle prices and interest rates.
Senator Elizabeth Warren of Massachusetts responded to these developments by formally opening an inquiry into the auto finance sector. On a Wednesday in early 2024, Warren, known for her focus on consumer protections, directed letters to a cohort of major auto lending institutions including Chase Auto, GM Financial, Toyota Financial Services, and Ally Financial. This initiative, confirmed by a spokesperson from the Senate Banking Committee, seeks detailed disclosures regarding repossession activities, error occurrence rates, and operational procedures within the car repossession industry.
In her correspondence, Warren emphasized the severe impact that car repossession has on individuals, labeling such events as "devastating disruptions" that can profoundly affect a person's livelihood. She expressed particular concern about repossessions conducted in error, including incidents where vehicles have been reclaimed from borrowers who are not delinquent or have negotiated repayment arrangements with their lenders. The senators' letters set a deadline for responses by February 16, but as Democrats hold a minority in the Senate, there is no subpoena power attached to this probe, rendering company participation voluntary.
Historically, enforcement against unlawful repossessions has been the mandate of the Consumer Financial Protection Bureau (CFPB). The bureau notably penalized Wells Fargo in 2022 with a $1.7 billion fine for, among various violations, the wrongful repossession of vehicles. However, the agency's scope has been diminished significantly in recent times, with deregulatory efforts during the prior administration aiming to limit the CFPB's consumer safeguard capabilities. Senator Warren underscored the detrimental effects of such policy shifts in her letters, stating that the previous administration curtailed the agency's ability to guard consumers against repossession errors.
Attempts to obtain commentary from the CFPB and the implicated auto lenders yielded limited results. While Chase declined to comment, representatives from industry trade groups such as the American Recovery Association, National Independent Auto Dealers Association, and American Financial Services Association acknowledged receiving the letters but withheld further statements at the time.
The context for this rising repossession trend centers on broader affordability challenges affecting U.S. consumers. Essential transportation via vehicles compels borrowers to prioritize car payments above other financial obligations, making the loss of a vehicle particularly catastrophic. Senator Warren highlighted this risk, noting that repossession strips individuals of mobility, which directly threatens their ability to maintain employment.
Recent data supports the scale of the issue. In 2024, 1.73 million vehicles were repossessed—the highest tally since the depths of the Great Recession—according to aggregated figures from Cox Automotive and Experian. While complete data for 2025 has not yet been published, sources within the sector indicate that repo volumes remain near those recession-era levels. George Badeen, an industry expert and operator of Midwest Recovery and Adjustment in Detroit, commented that the industry currently encounters abundant opportunities for repossession due to the precarious financial positions of many borrowers.
The upward pressure on repossessions aligns with a sharp rise in the overall cost of car ownership. Coming into late 2023, the average transaction price for a new vehicle nationally reached an all-time high of $50,000. This escalation is partly due to a shortage of lower-priced vehicle models, constraining affordable options for prospective buyers. Meanwhile, the used car market reveals a similar trend, with average prices registering $26,043 in December, a nearly 3% increase year-over-year as reported by Cox Automotive.
Compounding these price increases are persistently elevated borrowing costs. Despite the Federal Reserve’s interest rate easing in the previous year, auto loan interest rates have only modestly declined from peaks and remain substantially high. Data from Edmunds indicates the average annual percentage rate (APR) on used vehicle loans was 10.5% as of December, while new car loan APRs averaged 6.5%. Such high borrowing costs place additional stress on consumers’ ability to meet monthly payments.
This financial strain is most pronounced among subprime borrowers—individuals with lower credit scores who generally face higher loan interest rates. Fitch Ratings reported in December that the subprime delinquency rate, tracking the proportion of loan balances overdue by 60 days or more, stood at 6.74%. This figure represents the highest level recorded since data tracking began in the early 1990s, reflecting escalating credit challenges in this segment.
Senator Warren described the rising delinquency and repossession figures as signaling an urgent financial distress among American consumers. In contrast, Ed McFadden, spokesperson for the American Financial Services Association, affirmed that member companies are carefully reviewing the senator’s inquiry. He stressed that repossessions remain a last-resort option, undesirable both for lenders and borrowers alike, and that firms seek to collaborate with consumers facing repayment difficulties whenever feasible.