Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

How many people fail to pay their car loans?

| Jul 1, 2021 | collections

For many people, part of the American Dream is getting to go out and buy that first brand new car. Yes, it costs more than a used car, but you get a pristine vehicle that is yours alone. 

However, a modern car generally costs $25,000 or more. A pickup truck may start at twice that much. These are major purchases, and people take loans so that they don’t have to spend years — or decades — saving up the money. How many of these people then find that they can’t actually afford the American Dream and wind up failing to pay off their loans?

The numbers are telling

Repossessions are incredibly common — far more so than many people realize. Here are a few key statistics that really show what this looks like:

  • Each year, around 2 million vehicles are so far behind on payments that they get repossessed.
  • Every day, more than 5,400 repossessions take place, on average.

When you compare new car sales to repossessions, the repossessions come in at roughly 65% of the sales. In other words, one car gets repossessed for every 2.4 new cars that get sold. 

Of course, not every new car is sold with a loan. But most people do finance their new vehicles for at least a few years, which opens the door to these repossessions and failure to pay off the loan properly. 

With millions of cars going through this process every year, the amount of unpaid debt is simply staggering, and those looking to collect need to know what legal options they have to best assert their rights and protect their interests.