by Last year, there were 2,332,837 car loan defaults, exceeding levels observed during the Great Depression.
Approximately 1.73 million cars were repossessed, the highest figure in the last decade.
Sales in March, in fact, are expected to slightly decrease compared to last year, but the future looks bleak due to tariffs.
Economists have been worried about a recession for several years now, and it seems that it will finally happen due to a tapestry of interest rates, tariffs, and uncertainty. Warning signs are everywhere, and consumer confidence has suffered lately.
Another alarm bell started ringing when it was found that “the repo level was back to 2019 levels, while car loan defaults were higher.” Reviewing the numbers, last year there were 2,332,837 car loan defaults. This is a staggering number, even surpassing those during the peak of the Great Depression.
Last year’s default rate was 3.13%, the highest since 2011. However, this trend began with the Great Depression as the default rate was 3.18% in 2007 and jumped to 3.76% in 2008. After that, it peaked at 4.12% the next year and then gradually returned to the 2% range.
Since repos and defaults go hand in hand, it’s no surprise that the number of repossessions increased last year. Approximately 1.73 million cars were repossessed in 2024, marking the highest level since 2009. The repo rate, which was 2.3%, also rose to levels unseen in years.
Car Loan Defaults
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While these developments are alarming, Cox stated that March sales are expected not to suffer significantly due to the threat of tariffs or economic uncertainty. Nevertheless, they still expect a 1.4% decline compared to last year.
The future is as unclear as a broken compass, as Cox said: “Tariffs that have been enacted across North America at the behest – depending on how long they last – could upend both the car market in the U.S. and the larger economy as a whole.”
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