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Auto loan delinquencies and vehicle repossessions are rising steadily, reflecting both increasing financial strain on borrowers and growing operational pressure on lenders. According to the Consumer Financial Protection Bureau (CFPB), outstanding auto loan balances reached $1.64 trillion in late 2024, covering more than 100 million accounts. In 2024, more than 1.88 million vehicles were repossessed, the highest volume since 2009. A recent RDN Repossession Volume Report suggests the true number could be closer to 2.7 million completed repossessions, with nearly 9.7 million assignment orders placed.
Subprime delinquencies reached 6.6% in early 2025 — the highest rate ever recorded. At the same time, the success rate of completed repossessions has fallen, dropping from 38% in 2019 to just 27% in 2022. Collections teams are trying to manage risk and stay compliant; yet, as they face more complicated delinquent accounts, there are fewer recoveries.
So, what is causing this surge in delinquencies and repossessions? There are several conflating economic and market trends contributing to the pressure borrowers and lenders are feeling.
Why More Borrowers Are Falling Behind
Behind the rising numbers are the increasing financial challenges borrowers face every day. The increased strain is partly due to the growing gap between what people earn and what they owe. As financial pressure builds, even well-intentioned borrowers are struggling not to miss payments and to stay current on their auto loans.
Several factors contribute to the surge in auto delinquencies and repossessions, including:
- Rising vehicle prices and interest rates – New and used car prices have soared in recent years, pushing monthly payments well beyond what many borrowers can comfortably afford. Bloomberg reports that average car payments topped $750 per month in early 2025, placing significant financial pressure even on prime borrowers and increasing the risk of missed payments.
- Inflation, stagnant wages and mounting expenses – According to DebtStoppers, borrowers are carrying heavier financial burdens due to medical bills, job changes and emergency expenses. While many do not intend to neglect auto payments, they are simply overwhelmed by financial exhaustion.
- Tariffs and supply chain disruptions – Tariffs and ongoing global supply chain issues have increased the cost of vehicles and parts. Ultimately, this results in higher loan balances and monthly payments for borrowers.
The Hidden Risks and Expenses of Repossession for Lenders
Nobody wants the collection process to get to the repossession stage. Even though it might be necessary due to auto loan agreements being broken, repossession hurts borrowers and comes with significant hidden costs and risks for financial institutions, including:
- Compliance pressure – Repossession must be handled carefully to avoid violations like breach of peace or improper notification. Noncompliance can lead to fines and legal issues.
- Operational complexity – Coordinating with third-party repossession agents requires strong oversight. Missteps or poor communication can lead to delays, increased costs or regulatory exposure.
- Legal and reputational risk – Poorly managed repossessions can result in lawsuits, consumer complaints and long-term damage to a financial institution’s reputation.
- Lower recovery values – The resale value of repossessed vehicles has been falling, partly due to fluctuating used car markets and vehicle condition. Lower recovery amounts make repossession a less profitable recovery tool.
Financial institutions should strive to minimize repossession volume by carefully weighing when and how it should be pursued. Are there better ways to work with borrowers before reaching that point?
Early Intervention Beats Defaulting to Repossession
Early intervention remains the most effective way to reduce delinquency and avoid unnecessary losses. Real-time monitoring helps identify accounts trending toward risk, while risk-based segmentation and targeted outreach allow collections teams to engage borrowers before the situation escalates. These steps not only improve outcomes but also preserve borrower relationships and reduce long-term costs.
Still, not every case can be resolved before reaching the repossession stage. When repossession becomes necessary, financial institutions need to be confident that the process will be handled efficiently, with care and in full compliance with the law. Financial institutions don’t have to navigate those challenges alone. Consider working with a trusted partner, like TriVerity, who understands the complexities of compliance — and borrower communication.
With the right strategies and the right support in place, financial institutions can respond to rising delinquency rates with greater agility, as well as reduce their risk and recover more — even in today’s challenging lending environment.
By: Shannon Betz, Manager of Delinquency Management Extended Services, TriVerity
About the Author
Shannon Betz is the Manager of Delinquency Management Extended Services for TriVerity and has her degree in Paralegal Studies with an emphasis on bankruptcies. She brings over 20 years of experience in the collection world and extensive knowledge of bankruptcies. Shannon’s primary responsibility is overseeing bankruptcies and repossessions TriVerity coordinates and handles for our clients.
About TriVerity
TriVerity, a Velera company, is a full-service first- and third-party collection agency that manages early-stage delinquency, non-performing loans and charged-off loans with a comprehensive menu of collection services. Since 1990, TriVerity has worked with over 2,800 financial institutions nationwide and is a leading industry expert for financial institution collections of all loan types. TriVerity’s broad spectrum of collection resources and training programs help financial institutions manage and mitigate loan delinquency rates. For more information, go to www.TriVerity.com.
The Growing Wave of Auto Repossessions: What Lenders Need to Know – The Growing Wave of Auto Repossessions: What Lenders Need to Know – The Growing Wave of Auto Repossessions: What Lenders Need to Know
The Growing Wave of Auto Repossessions: What Lenders Need to Know – Credit Union Collections – Credit Union Collectors – Lending – Repossess – Repossession – Repossession Agency – Repossessor – Repossession – Triverity – The Loan Service Center
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