CFPB finds rate of auto repos exceed pre-COVID levels

The CFPB has released a report — Repossession in Auto Finance — showing that the rate of auto repossessions at the end of 2022 surpassed pre-pandemic levels. Additionally, lenders were increasingly more likely to use third parties, called forwarders, to manage the repossession process. The use of a third party generally increases consumer costs. The CFPB analyzed data from nine major auto lenders covering accounts with activity between 2018 and 2022. This data show increasing consumer risk in the $1.64 trillion auto loan market.

The CFPB said that consumers can continue to owe money on their vehicle even after it is repossessed and sold by the lender. The average outstanding balance for consumers that had an outstanding balance after repossession in December 2019 was more than $10,000. Following a brief drop, the average outstanding balance sharply increased and was more than $11,000 in December 2022.