Auto repossessions are on the rise, with a 43% increase between 2022 and 2024, totaling 1.73 million units. With auto loans becoming more expensive and delinquency rates climbing, many buyers are struggling. Experts attribute rising prices to U.S. tariffs on imported vehicles, putting further strain on household budgets.

Repossession can happen quickly and come with high costs, even after the vehicle is taken. Lenders can repossess a vehicle without a court order if the loan is in default. Missing payments, force-placed insurance notices, or payment changes are red flags. The financial impact can be long-lasting and costly.

After repossession, lenders sell the vehicle at auction, potentially leaving borrowers with a deficiency balance. Additional fees like towing, storage, and administrative costs can quickly add up. To mitigate damage, borrowers can explore hardship forbearance, payment extensions, or loan restructuring options. Early action is key.

It’s crucial to be aware of your state’s repossession laws and communicate with the lender to prevent repossession. Restructuring a loan is often preferable for lenders. Understanding the process and seeking assistance early can help avoid the financial consequences of repossession.

Read more at Yahoo Finance: Car repossessions went up 43% over two years as high prices squeeze Americans. Here’s what you can do if you’re at risk