Car loan defaults are skyrocketing in the United States, and the figures are undeniable:
• 2,332,837 defaults recorded in 2024, exceeding the levels of the Great Recession.
• 1.73 million vehicles repossessed, the most in more than 10 years.
• A 1.4-percent drop in sales forecast in March, with an uncertain future due to tariffs.
With a mix of mass layoffs, economic instability and new tariffs that will send prices up, the U.S. seems heading for a recession. Consumer confidence is at a 12-year low, and the effects are already being felt in the automotive sector.
Vehicle repossessions up sharply
According to Cox Automotive, the default rate reached 3.13 percent in 2024, its highest level since 2011. For comparison:
- • 2007: 3.18 percent
- • 2008: 3.76 percent
- • 2009 (peak): 4.12 percent
- • 2010s: around 2 percent
This surge has led to a massive wave of vehicle repossessions, with 1.73 million registered in 2024, the highest total since 2009. The repossession rate jumped to 2.3 percent, a return to pre-2008-crisis levels.
What impact on the automotive industry?
Despite these worrying trends, Cox Automotive estimates that March sales will not be immediately impacted by economic uncertainty and threats of new tariffs. However, the situation could deteriorate rapidly.
Experts warn that if the proposed taxes in North America are applied in the long term, they could disrupt the entire automotive market and the American economy.