With the economic crisis reaching its peak, vehicle repossessions in the US have grown in number to an all-time high of 1.67 million units for 2008.
This figure is up some 12 per cent on the year prior and according to one industry analyst at least, is predicted to increase again this year.
“They will certainly be up in first half of this year, and with the labor market deteriorating so substantially, it might be up quite a bit and might offset the decline I expect in the second half of the year,” said Tom Webb, chief economist at vehicle auction giant Manheim, “We won’t have a 12 per cent increase, but I would expect something in terms of less than a 5 per cent increase”.
On the used car front, Webb said he expects wholesale prices to stabilise or rise somewhat this year as the credit freeze shows signs of thawing. A light at the end of the tunnel for the struggling used car sales force who last month saw a fall in the Manheim Used Vehicle Value Index (down 0.3 percent from 98.3 in November 2008, and 110.2 in December 2007).
It was the index’s biggest annual decline since it began in 1995, Webb said. The index is adjusted for vehicle make, model and time of year.
Though wholesale prices of large SUVs and light commercials in December were still well below their December 2007 values, those segments showed significant price increases when compared with last summer. Conversely, wholesale prices of compact cars declined in December when compared with prices last summer.
Webb attributed the price movement in part to market correction and to a reduction in petrol prices. He said some dealers report that their new-vehicle inventories are short on trucks and heavy on cars, which also helps explain used-vehicle price shifts.
If anyone is experiencing difficulty in meeting car loan repayments it is advisory to contact your credit provider as early as possible to avoid repossession.