MSN Money reports today on the escalating default rates plaguing the car industry: The Repo Man is getting busy:
“The shorthand is that for years we've lived beyond our means, reflected in record debt levels, and now comes the paying phase,” said Christian Weller, a senior fellow at the Center for American Progress, a progressive think tank in Washington, D.C. “Car loans have expanded as fast as mortgages, and in terms of the categories of what people borrow for, it is the second-largest.
“It fits the overall picture that all the economic-distress measures are trending upward.”
Repossession agents in areas hit by foreclosures say they've been picking up vehicles both from people struggling to keep their homes and from those now left without work: construction workers, pavers, landscapers and real-estate agents.
For the past year I have noted a billboard outside a local Ford dealership that we drive by each morning. The sign says: “Bad Credit, no Credit. Bankrupt? Bank yes no? We say yes!.” Call me insane, but who the hell can afford to sell cars to people that can't afford to pay for them? What kind of a business model is this? Either we have launched into a world where gravity no longer applies, or we are in for a very nasty reality check as bad loans are eventually taken into the numbers over the coming months.