Many are struggling to make ends meet through the COVID-19 pandemic, but automobile repossessions are expected to increase in the near future as financial assistance programs dwindle and purchasers lose their temporary protections.
John Van Alst from the National Consumer Law Center told KGW8, “We’ve certainly seen an uptick in defaults and delinquencies. I think that’s going to translate into a really large increase in repossessions.”
Credit reporting agency TransUnion’s data shows that the number of loan accounts that are 30 days past due went up from 3.0% in July to 3.1% in August.
A multitude of factors could contribute to a surge in repossessions, as executive director for the American Recovery Association Les McCook told KGW8; the economy, the pandemic, and the election could all have impacts on the repossession market.
Forecasting the repossession market is particularly difficult due to the uncertainty about possibly receiving another federal stimulus spending package. If another package does get sent out, it would definitely help people get out of delinquency or default status, as Zo Rahim of Cox Automotive told KGW8.
The increase in repossessions is expected to occur sometime next year, but the exact time and amount is unknown.
A Portland woman, Sabina Urdes, felt the effects of the coronavirus pandemic and repossession firsthand when her car was taken from her after being behind on car payments for two months. She told KGW8 that no one warned her that her car would get repossessed before someone came to take it away.
Urdes first bought the gray 2015 Mazda hatchback in 2018 and was proud that she was able to make the purchase. However, when the pandemic hit, she was laid off her job and had trouble finding work, especially as a single mom. All she could do was wait for unemployment benefits.
Urdes, in need of help, contacted her creditors, including Chase Bank, and her car payments were temporarily deferred. After the grace period, however, and with no warning, her car was repossessed.
A Chase spokesperson told KGW8 that they made “repeated attempts to contact the customer.”
The spokesperson also said that Chase Bank granted more than 300,000 payment deferrals nationwide in light of COVID-19; they also stopped all repossessions in mid-March, but vehicle repossessions were started back up again in July.
Oregon is one of many states in which a creditor can take your car as soon as you default on your loan or lease, allowing them to repossess without notice.
According to Urdes, Chase also demanded a full payment of $10,000 to get her car back.
She told KGW8, “Once they took the car there was no negotiation, no talk, no sympathy.”
Urdes eventually shared her story to social media, protested with signs in front of a Chase Bank, demanding them to stop the repossessions, and, along with supporters, wrote a letter to Gov. Kate Brown calling for her to create restrictions on repossessions during the pandemic.
Seven states have adopted laws or executive orders that protect people from car repossessions during COVID-19, but Oregon is not one of them.
Urdes was eventually able to get her car back with help from a community member who provided an interest free loan. However, many Oregonians and Americans may not be so lucky — as protections expire, lender deferral programs end, and the pandemic rages on, repossessions are likely to increase nationwide.
It’s suggested that if you can’t make your next car payment, contact your lender, refinance your loan, and don’t hide from the problem – learn about your options to prevent a repossession of your vehicle.
By Cara Nixon