Recession Is Here? Voluntary Repos Up 500% Banks UnRealized Losses Skyrocket In Q2

In today's video I talk about recession, banks in trouble, and customers are coming in droves to voluntarily repo their cars. As customers are tired of 600 to 1000 dollar payments on basic cars like a Honda civic.
The car market could cause a bigger crash then we saw in 2008.
Let's discuss this in the comments.

[lorenhewitt]

The idiots who borrowed the money to purchase overpriced cars and the idiots in the banking system who loaned the money are at fault for their problems. Bailouts shouldn’t happen again. Sorry.

[DavidLittle-ye]

But you don't understand, the government says the economy is so damn terrific 😆😆😆

[Jrbrass]

Here's something else to think about that no one is mentioning. From 1982 to 2000 (18 yrs), I repossessed for Bank of America, four Western states. Whether you turn your vehicle in voluntarily or involuntarily (repossessed), if you're under water, you still owe the balance of what the vehicle sells for at whatever auction. Just because you turn it in voluntarily doesn't mean your obligation is totally over. You still owe the deficiency. Along with repossessions, I also conducted floorplan audits. The dealer does not own the new vehicles, whatever bank and/or institution that handles the floorplan does. Vehicles get dropped shipped from the manufacturer. As soon as their shipped, they go on the floorplan. The dealer then in turn pays floorplan interest on every new vehicle that hits that lot. Now, if the dealer can't sell cars, they still need to pay their operating expenses. Over the 18 years, I have participated in shutting down dealerships due to the fact they would use whatever funds to keep the dealer afloat. When a vehicle is sold and financed through whoever, once they get the funds from GMAC, NMAC, etc, the dealer has 3 days to pay off that vehicle from the floorplan. If the dealer does not, then it becomes Sold Out Of Trust. When dealers are hurting, not selling cars, they sometimes use those funds to pay operating costs. As the bank representative, I had to personally open the dealer's mail and whatever funds they received, take those funds directly to the bank so the dealer could not use them. When whatever institution shuts down a dealer, they come in late at night, locks are changed, fencing is placed around the dealership, all the new cars go in service bays, showrooms, in the back, used cars are put on transports and off to whatever auction. All of these actions are preplanned. It's pretty sad when dealership workers and management show up the next morning and the dealership is taken over. I see this happening again if things don't change.

[mongo]

There is too much financial illiteracy in this country. You should never buy something if you can’t afford it! Live within your means and stop trying to keep up with the Joneses. A 10 year old Corolla may not be sexy but it’s a great cheap car.

[mictdave]

I remember in 2008-2010 they offered massive rebates on pickup trucks. Gas was expensive and construction work was down. Nobody wanted a gas guzzling pickup. Those are the kind of rebates I’m waiting for before I buy a pickup again.

[stevencarlson]

My insurance went up 12%. When I called, they told me to be glad that was all. We tried to get my 21 year old granddaughter insurance for a 2003 Lesabre and the cheapest we could find was over $500.00 a month. Ya this economy is coming to a end. I lived through 3 crashes. I feel the government has been hiding the real numbers for 2 years.

[Dgtal_Hppy]

my 22 year old car has been paid off for a long time. I rebuilt the motor and repainted it a few years ago, $0 month payments and average of $100 -$120 a month in maintenance on average.

[PassportBrosBusinessClass]

Between the car note and the insurance, most buyers have been pushed to $1000 a month just for their cars.

[trbstang]

Yeah, insurance has gone up. Mine was about $640 a month just over a year ago for 5 cars - 4 full coverage, and my homeowners insurance. Now its $1, 020 for the same thing. Homeowners went up about $100 and the rest is auto which did almost double. I can afford it, but it does cut into my disposable income. I'm planning to raise deductibles and do whatever I can to get it lowered.

[joerapo]

People underestimate what Cash for Clunkers did to this bubble back in 2008. Keep in mind all these numbers are adjusted to 2023 dollars through inflation. In the 20 years between 1983 and 2003 the average new vehicle cost went up just under 7k. In the 20 years between 2003 and 2023 it went up 17k. Anyone over 40 will remember being able to easily find quality decent used vehicle for 2-4k. You could find pretty nice used cars for 10k. After Cash for Clunks that changed. Then those costs drove more people to buying new.

[johnstuartsmith]

In 2008, the assets that the banks were repossessing were houses. The banks resold them slowly, knowing that placing too large an amount of foreclosed houses on the market would further drive down the resale prices. The mortgage lenders had time on their side because they knew that houses and land appreciate in value and that they could rent out many properties until the prices came up. The vehicles repossessed by banks and finance companies won't ever increase in value, and the oversupply and higher insurance premiums further depress the resale values. People are further underwater on their loans and facing higher premiums triggering voluntary repos which adds to the oversupply of used cars, driving down their value. The increases in suspicious "car thefts and arson" drives up the premiums and further tightens the spiral.

[OffroadCpl]

I just had 2 credit cards cut my limit in half and I got a 830 credit score. Banks are running scared

[nancykramer]

After watching a lot of your videos I think that never buying a new car in my life was actually a really good idea. I really do hate depreciation.

[PANIC_aka_PinD]

I told my wife a few years ago ... she handles our investments and finances ... that autos and auto loans were going to be the next bubble.

[mikeharris]

In 2018, I purchased a new Ford F-150, XLT trim, my insurance was $630 per year, Fast froward to now, I purchased a new 2023 Chevy Silverado, LTZ trim, last year. My current insurance cost is $1, 850 per year, 300% increase with State Farm. I shopped around and the rates were more than I am paying. Wow. I am fortunate enough that I can pay cash for my vehicles.

[theberrybest]

The insanity is real. You can see the wave on the horizon, and it's closer than most people think.

[theelmobad]

Bubble popped a while ago! People are just feeling now.

[MM_in_Havasu]

I came in with a 35% down payment in cash on my '23 Chrysler 300C SRT, cut the payment considerably and I'm in a position where I'm doubling up on car payments to pay the loan off early( through a credit union as well).
Can't afford it, don't buy it! I see too much of this going on, especially in the last couple of years with obnoxious markups on cars and people paying extra $$$ for dealer markups and add-ons, etc. They signed on the dotted Banks will end up eating these bad loans at taxpayers' expense.

[anotherperspective]

Capital One & Ally both have over $70B in auto loans outstanding and the auto market is in deep trouble.

[Ryan-dswx]

TK, I was living in Vegas during the 2008 economic implosion. Born and raised there. Between 2009 to like 2011 or so, it was bad...real bad. All the new fresh transplants there from the last couple years don't realize Vegas is a Feast or Famine town and they haven't experienced a famine cycle yet. It's 90%+ service based industry there and tourism. That shit is going to dry up instantly when this all implodes. Everyone that has racked up massive consumer and auto debt these last few years....well....it's going to be mighty painful for you all.