People HAVE STOPPED PAYING Their Car Payments

car repossessions are spiking all across the country right now repo today people are broke and can't afford to make their car payments repo tomorrow so Ford tried to file a patent to have the car repo itself there's an autoone crisis happening in America right now and I'm seeing it every single day at these used car dealer auctions repo repo and if you want to know what autoone delinquency looks like it looks like this right here right now there are so many repos in the system that there is a shortage of repo drivers to go get them people are trying to find ways to get out of their cars that they could not afford to buy when they signed up for the loan everything associated with owning a vehicle right now has gone up in price making it harder for the average American to pay their car payments so this autol loan crisis that we're going through right now is going to break the car market and it's so bad right now that not only are consumers getting their cars repossessed but dealerships dealerships are getting their cars repoed off of their lot right now I'm here at a used car dealer auction and this is what a repossessed car looks like and today I going to show you what a dealer pays for this repo you know what a repo looks like it looks like the brightest thing on the road all these cars all these cars behind me in this row they're all repossessed vehicles and check this out this is more of what you get this is a Cadillac Escalade this was a nice vehicle at one point and now I mean it's not even being held together by Bungee straps they didn't want to spend money on the bungee straps to connect the bumper to the car more repo goodness right here that whole side end's been smashed in the average price for a gallon of gas right now now in the US is $366 in just this last year your insurance rates have gone up by 22% new car interest rates are over 9% and used car interest rates are over 14% over 7% of subprime car loans on cars just like this right here are delinquent that's the highest that has been since 2006 and negative equity is going to continue to be a massive problem for consumers that bought over the last two years because cars that you couldn't find in the last two years guess what rows and rows and rows and rows and rows of them are at dealerships right now everything's costing more whether it be groceries housing your insurance gas everything right now in this country costs more money and it's not just car payments that we're seeing go delinquent right now we're seeing a massive spike in credit card delinquencies and we're just seeing across the board that as everything gets more expensive people are not paying their bills they're not paying their credit card bills and they're not paying their car bills so here's what happened people got loans for these Chargers these Challengers when they were in short supply and they paid $10,000 over sticker now we fast forward to two years from then and what do we have this whole line of Challengers Chargers they're all over this lot their values have gotten absolutely crushed and now people are losing their cars so who's going to end up eating all of this loss it's going to be the bank that takes a major major haircut on all of these repos the consumer the consumer in this country right now is strapped and they can't afford to pay everything right now so something's got to go we know that they're going to pay for their house we know that they're going to pay for their phone but you know what's one of the first things to drop when times get tough their car payments and they're going to lose their cars and when they lose their cars they lose their jobs vicious cycle keeps going into effect all right and we're talking about repos this is what repos look like and this is how they run they run hot they're bad cars for the most part if somebody is not going to pay their bills on their cars they're not going to take care of them window doesn't work and you know what the motor is probably trash because it is running hot and repossessions they're not even the cars that we want to buy Ed car dealers like myself we know that these repossessions they're scratched up they're dented they're dinged they're nasty they're not mechanically sound there might be one out of every 10 repossessed vehicles that we even consider buying they're that bad and I sell cars that are $5,000 and under and even I I don't want to buy repossessed Vehicles it's so bad right now that we're seeing Trends on Google search that people are trying to figure out how to get rid of their cars we're seeing that the term give back car is spiking we're seeing that how do you get out of your car alone all these Search terms are spiking people are trying to get out of these cars and we get this at auction too this has 305,000 miles but but this is a repossession car this is a repo yes cars that have that much mileage and are that old can also get repossessed CU people who buy used vehicles they also can't afford to pay cash for them so they have loans they have payments they default on those payments and then they get their car picked up and then it winds up here at this auction for with 300,000 Mi for another dealer to buy and the spike in auto loan delinquencies and the auto loan repossessions are not just hurting the consumers they're hurting these big dealerships too so here's the thing because autol loan delinquencies are spiking Banks are tightening up so what that means is that these dealerships these big dealerships just like this one are having a harder time moving Vehicles because they can't get consumers into loans and yes yes we have a massive spike in these delinquencies yes we have a massive spike in these auto loan repossessions but it's not the answer for the car market the reason being is because we have lost so many trade-ins from these new car dealers not selling right now that no matter how big the explosion is in the repossessions it can't fill the void that's being left behind by the lack of trade-ins that are not being pumped into the market right now and I know I talk about these Chargers and these Challengers a lot when I'm talking about negative equity and I'm talking about uh uh High repo rate that's what we're seeing a lot at these auctions but what we're also seeing a lot of are these trucks these F-150s these Rams because the same thing happened consumers paid way too much for them and they PID these Market adjustments on top of it so it's just not these sports cars it's just more likely to see it in these sports cars uh because people bought them they couldn't pay for them but you're also seeing it in the big trucks too because of how many Market adjustments were on top of these things dealers just couldn't get them but now what we're seeing Ford uh stantis GM we're seeing trucks stack up everywhere you can get trucks now so you don't have to pay Market adjustments so those people are very very very underwater on those trucks also all right let's give you guys a walk around of what a real life repossessed car looks like at this auction we're at the auction lots of repos everywhere right this is one of them we're going to show you it go through lay but before we see it go through the auction I'm going to walk you around and show you what this actual repo looks like it's got It's got I tell you it's a 2016 it's got 213,000 Mi so they drive the crap out of it all right here's that repo all right they're trying to get it for 75 they're asking $7,500 for it no biders drop down to $5,000 they got bids on it and inside it's all messed up check this out when people do not pay their bills they're not going to take care of the car this is what it looks like if they know that they're going to lose the car most people that are going to get their car repossessed they know that they're going to lose it beforehand why would they take care of it so we're going to check this car out in the auction up to 51 5200 5300 every time it yells he's got a bid every time it yells he's got a bid there's Auctioneer up there yelling through that speaker all your all your biders are out there up to $5,400 up to $54 go roll out says it takes $7,000 to buy it take 7,000 to buy it they're going to No sell it correction the buyer said that it would come up to $6,100 on that Challenger and they sold it sold it for $6,100 dude's been trying to crank this repo for like 5 minutes TR again nope yeah and oh almost almost almost so now how does a dealership get their cars repossessed from their Bank well a lot of these dealerships that buy their inventory they don't own them out right they actually Finance them through the bank so when a dealership goes through 60 90 days they don't sell a lot of cars they don't come up with a lot of cash if they can't pay their bills then yes the bank will literally go to the dealership pick up those cars and dump them at auction this was a nice vehicle and then uh then the repo Monster uh took a bite of it up there so you got that around there and then back here boom so uh yeah stop paying for it and stop driving safely I'll same time so repossessing a vehicle has become very very very very dangerous and it's always been dangerous but now the sheer the sheer quantity of how many are out there repo drivers are risking their life every single day to go get these cars for these uh these banks these lending agencies it's so bad that Alabama has just passed a law to make it to where these repo drivers have to notify police before they're going to go pick up these cars they have to uh say the name the location uh exactly where they're going before they go pick up these cars and the reason why they have to do this is because it's just so dangerous to go pick up these cars repossession goodness right here I don't even want to put my hand down to lean into this car that is absolutely disgusting what what happen I don't what happens like I don't I don't get it so you have Ford you have Ford that tried to file a patent to make a vehicle repossess itself and that's what we're moving towards in this day and age of the technology in these vehicles you already have Teslas that can drive themselves so think about this when you stop making your payments that car is going to shut down it's going to lock you out of it and guess what it's going to drive itself back to uh whoever The Lending agency is that gave you the loan on that car that is the direction we're going this patent that uh that that Ford tried to get to go through that's just the beginning it's coming and these companies are going to know exact where you are at all times and here's the thing we have not even hit the peak of repo season yet I go through all of these cars I show you all these repossessions but really this is just the beginning see there uh seasonality to repossessions and yeah the economy has not been great and we've seen repossession Spike we've seen autoone delinquency Spike but we are just at the beginning of peak repo season see what happens is people use their tax refund checks they go put down payments on these cars these cars that they can't afford and then a few months after which is where we are right now they stop making their payments and what happens their cars wind up here so right now we're starting to see the surge in repos and it's going to continue from here because this is just the beginning of the peak of repo season and when you're talking about consumers that get into this problem of okay buying a car getting a repossessed buying a car get it repossessed it becomes a a really a big vicious cycle of wealth Destruction for a lot of these consumers because they'll get into a car they'll put $1,000 down they'll go to a Buy Here Pay Here dealer and then they'll make payments for three four months whatever and then they'll stop making their payments and at that point they'll lose their car and then when they scratch together another ,000 what will they do they'll go put another down payment down and then they'll pay for another two three months as long as they're able to work and and as long as they keep going to work and making their payments uh but something happens cuz they're living paycheck to paycheck any crisis makes it where they have to drop a payment and they know they know that they'll be able to just okay if I scr up another $1,000 then I can get another car so let's let this car go back and let's start the whole cycle over again people can never get ahead when they get into this cycle and it's very very sad but I see I play out every single day through these car auctions all of these cars this is most likely exactly what happened consumer Falls onto a rough time they can't make their car payments and then the cars end up here and now here's how these repos affect me as a as a small used car dealer well if these big car dealers aren't selling as many because banks are titing up then they can't get trade-ins from consumers so that means I can't get cars at auction keeping Ed car prices elevated and one big thing that's holding people back from buying these big trucks from buying all these new vehicles well I mean the average price of a new vehicle right now is about $50,000 and when you have inflation on top of all of that you think think of housing you think of the price of groceries the P the price of insurance it's limiting people from what they can buy at these dealerships which is another problem for production for a lot of these companies meaning layoffs have to happen but just go back to housing I have a buddy that recently had to move and he was just trying to find a one-bedroom apartment around my area we're near Charlotte it's not like we're in California it's not like we're in New York but a one-bedroom apartment he couldn't find anything halfway decent for under $1,300 so if you have someone just like that that needs to pay $1,300 a month just for a small apartment then they can't also pay $1,000 a month for one of these trucks production will get cut because everything costs so much and if you add in a $1,000 monthly payment on top of one of these trucks for these uh consumers it's not going to get done and I read a lot in my comments that you say that I'm the canary and the coal mine right so really what I'm showing you is just really a leading indicator of what I think are things to come so what we're seeing at these auctions you see a higher repos and you see fewer Vehicles being sold by these uh new car dealers and those are going to be the first things that happen the the bottom barrel of the uh of the economic system you're going to see that people who have not very much money they're going to start defaulting that's the first crack in the system then you're going to see the upper end of the economy whereas the people who are buying new cars they stop buying new cars and so you're getting hit from both sides of the economy at this point and then people stop spending money businesses make less money they start laying off people and so the cycle goes less money in the economy less money to go around for everyone Banks tightening up we're seeing this this is just the beginning this is the beginning of a cycle that we're going to see play out where money is not going to change hands as often as it has over the last 3 years and businesses businesses suffer when this happens all right we'll give you guys a no no no over 7% of subprime subprime car loans gone up in price making it less making it harder for the average American to

Channel: Car Questions Answered

Views: 415,130

Keywords: Car Questions Answered, car auctions, car buying tips, car market, car questions answered, carmax can't sell cars, how to negotiate, upside down in car loan options, used car prices, truck prices, new car prices, used car dealer auctions, toyota, ford, dealer auction vs public auction, dealer auto auction, dealer auction prices, stock market, auto loan crisis, repo, auto loan crisis 2023, car market crash, car market 2023, ford maverick, auto loan crash, financial collapse

Id: w8fT4hFeYww

Length: 14min 46sec (886 seconds)

Published: Mon May 13 2024