With Repossessions at Their Highest Level Since 2009, Customer Support Matters More Than Ever

The automobile industry is experiencing a surge in repossessions that rivals the numbers we saw during the Great Recession. In 2025, more than 2.2 million vehicles had been repossessed by November, with the annual total expected to exceed 3 million. That followed an estimated 1.73 million repossessions in 2024, the highest annual level since 2009 and a 43% increase from 2022.

High vehicle prices and borrowing costs have pushed the average car payment to an all-time high. Not only are vehicles much more expensive to own, but prices for everyday goods like gas and groceries are also rising. Consequently, many Americans are experiencing financial difficulty.

While repossessions have always been part of consumer auto finance, the increase we are witnessing affects not only American households but also the dealers and lenders working with them.

Many factors can lead to a repossession, and not every situation can be avoided. However, dealers and lenders can create an environment where customers understand the resources available to them and feel comfortable communicating when something goes wrong.

Portfolio Pressure Affects Everyone

When customers begin missing payments, the effects extend well beyond an individual account. Cash flow tightens, credit lines receive more scrutiny and lenders must make difficult decisions about how much flexibility they can provide.

Every organization has some room to work with customers. A traditional lender might allow a customer to defer a payment, extend the loan or enter a temporary hardship plan. A BHPH dealer may have additional flexibility because the dealership manages the sale, financing, account servicing and customer support within the same organization.

That does not mean one model is inherently better than another. It means each organization has different resources available and must determine how to use them effectively.

Regardless of the lending model, flexibility only works when the customer participates in the conversation. A lender cannot help solve a problem it does not know exists. That is why the relationship between the customer and the organization servicing the loan matters so much.

Building the Relationship Before Problems Begin

The foundation for productive communication should be established before the customer drives away.

At Oak Motors, many of the customers we serve have experienced previous financial setbacks, which may include job losses, medical expenses, credit challenges or past repossessions. Credit history is part of the conversation, but it does not always tell the full story. We also look at factors such as stability, affordability and the customer’s willingness to communicate and work within the program.

Just as importantly, we explain what customers can expect from us and what we will need from them in return.

The shared goal is for the customer to purchase a reliable vehicle they can afford to own, complete the loan and improve their financial position along the way.

Dealers and lenders should make it clear from the beginning that asking for help is better than avoiding the problem. Customers are more likely to make contact early when they believe the conversation will focus on finding a solution rather than immediately taking away their vehicle.

Support Resources Give Customers More Options

In my experience, most customers stay current on their loans as long as they have cash coming in. So when a customer misses a payment, we begin communicating with them right away.

In most cases, another financial emergency has taken priority.

An unexpected repair is a common example. A customer may spend the money intended for their car payment on a repair because they need the vehicle to continue working. Without additional resources, they may solve the immediate mechanical problem but create a financial one.

This is an area where dealerships and lenders could consider how they can better meet customers where they are.

In practice, we offer programs that can reduce certain repair and maintenance expenses, provide alternatives for collateral protection and help customers manage unexpected vehicle costs. These resources are not a substitute for making payments, but they can prevent a relatively manageable problem from becoming a repossession.

Other lenders may not control the repair or service process, but they can still look for ways to connect customers with assistance, communicate hardship options more clearly or build partnerships that help customers overcome common obstacles.

That experience points to a broader lesson for the industry. Customers are not only evaluating interest rates and monthly payments. They are also considering the level of support they will receive throughout the life of the loan, especially when something doesn’t go according to plan.

When Repossession Becomes Necessary

Better communication cannot prevent every repossession. Sometimes taking back the vehicle is the only reasonable outcome.

In our business, repossession generally becomes necessary when communication stops, a customer does not follow through on an agreed-upon arrangement or there is no realistic path to continued payments.

Even then, the process should be handled with respect. A repossession doesn’t always have to permanently end the relationship between the customer and the dealer. We have had customers return to us after experiencing a repossession because circumstances change and people can recover financially.

The goal is to reach the best possible outcome for both sides, even if that means returning the vehicle.

Taking the Long-Term View

Repossessions will continue to rise as long as consumers face sustained financial pressure. We can only control how we respond.

At this moment, we’ve decided to approach delinquent accounts by leaning on relationships, communication and proactive support, even if it’s more expensive in the short term. By staying financially disciplined and avoiding shortcuts, we’re holding ourselves to the same standard we expect of our customers.

The operators that stay disciplined now, communicate early and protect the customer relationship where possible will be in a stronger position when the cycle turns.