Part 5/12:
The rise in repossessions is closely tied to inflation and the subsequent spike in used car prices. During the recent economic landscape, used cars became markedly more expensive due to shortages of vehicles coming off lease and disruptions in supply chains affecting car chip manufacturing. High-end vehicles equipped with advanced technology, particularly those involving sophisticated chips, were in short supply, pushing prices upward.
Many consumers bought these higher-priced used cars on financed loans, often with extended terms that stretched out over many years. As interest rates and vehicle prices increased, so did the total cost of ownership, making it more burdensome for borrowers to keep up with payments—especially if they faced job losses or income reductions.