Car repossessions are on the rise in warning sign for the economy

[panganib999]

Car and housing markets are two very important indicators to understand the mode of the economy. Because these are two things that families own when they have some surplus money and a stable income source. So whenever there is a decline in car and housing demand and a rise in non performing assets, it's usually a very concerning matter for the economy. It shows that the income sources are drying out and new sources are not getting created. That also initiates a decline in demand of general consumer goods which eventually leads to more job cuts and income losses.

Probably the first world countries are moving towards a recession and the third world countries are going to be benefited out of it.

The most crucial factor to consider here is 'Inflation,' It's driving the economy insane, I only hope that its effect would not deprive people of their wants and comforts as it has already done.

When the price of everything is persistently rising, how could commoners be able to change their cars, house and valuables? This is practical in the sense that the purchasing power of their legal tender is shrinking, and this is happening in an environment where wages and salaries are not reviewed upwards. This is the time to be prudent and also look for extra ways of income to reduce the impact on ourselves and our loved ones.

I think his statement just makes sense. The fact that these are purchases you make when you have more than enough money. The poor will not buy cars no matter the situation of the economy because they just couldn't afford it. It is about inflation but I think he made a sound statement with saying that these types of buys are good indicators of a decline in economy. Joblessness, poverty index, and homelessness could easily be attributed to other things, like governance for example, so it's not as great as an indicator per se.

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[adaseb]

I am not surprised why they are asking $7000 for that Camry. Seen something similar here with old old Toyota’s at new car Toyota dealers.

Except it was maybe a 1999 Toyota and they wanted like $5K for it. It had decent mileage and all service records,
Might of been a 1 owner even. And it actually sold. Why?

Because $5K or $7k is a lot better than $50K for a car. And since they are reliable you don’t need to worry too much. Some people just needed wheels to get to work. Hence why they sell at those prices.

[Fortify]

The same negative trend also applies to housing loan markets.

While many contractual loans are failing at historically high rates. Could there be an eventual upside in terms of car and real estate assets becoming more affordable within the foreseeable future?

It has recently been acknowledged that used car prices are downtrending sharply at a record rate, (I think) in correlation with the elevated rate of failing car loans.

Cox Automotive said Wednesday that its Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at its U.S. wholesale auctions, has declined 15.6% from record levels in January through November. The index dropped to 199.4 last month, below 200 for the first time since August 2021, and is down 14.2% from the same month a year ago. It marks the sixth-consecutive month of declines.

Perhaps we will likewise see real estate market values fall within a similar trend, which would make living space more affordable for many current full time employees who cannot afford it.

Unfortunately, there could be another trend in play here. Cars and living space might increasingly become deflationary in supply. It has been reported that US automakers are inching nearer to bankruptcy. Which could result in overall scarcity of car supply, if production and competition decline.

Similar trends could also apply to US real estate markets. Where influxes of immigration could contribute towards real estate and living space becoming increasingly scarce and limited in supply.

But in the short term, from the chart above we can see that used car prices are declining and perhaps that will correlate with long term market trends to make transportation and living space more affordable.

It happens in the downwards move of every economic cycle. What I find curious is that yes, there has been a decline in second hand car sales this year, but judging by the graph they are still massively above what they were in 2019 before the Covid pandemic. This points to supply chain issues as well, where it is simply harder to source newer cars so many people are returning to the second hand car market which pushed prices up in that sector. Things are starting to normalize for now but China is currently in the midst of a massive spike in Covid cases after loosening the rules, so we may find that supply chains again get crippled with potentially hundreds of millions of works in the "factory of the world" being ill.