You know it's bad when even the repo man is having a hard time making it. The recent The Wall Street Journal titled, "The Recession's Gotten So Bad, Even the Repo Man's Singing the Blues" chronicles the trials and tribulations of Tony Cooper, the owner of Professional Auto Recovery LLC. Over the years abundant and easy credit helped Cooper grow his business. It was easy for people with marginal credit to get loans. If those same people got behind on their car loans they would simply walk away from their car because they were confident some other sub-prime car lender would give them a loan for another car.
While the number of car repos have increased in the past year, vehicle financing is down by 32%. This seems to suggest a dramatic shift in the car buying habits. This trend is in part a result of a tight credit market but also a reflection on how the economic downturn has incentivized people to not go further into debt for a car. With rising unemployment, it is difficult to see what could break this trend. Given the decline in auto loans, it might be a good time for Mr. Cooper to park his tow trucks and open an auto repair center.
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