Car repossessions expected to hit their highest rate since the 2009 recession. Is it a sign the economy is in trouble?

More Americans are struggling to support up with their car payments. Auto indebtedness delinquencies person risen supra pre-pandemic levels aft hitting grounds lows during COVID — and much borrowers are present facing defaults and repossessions.

A caller study from the Recovery Database Network (RDN), says much than 2.5 cardinal cars were repossessed past year, and this twelvemonth is connected way to deed 3 million, the astir since 2009 (1).

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This signifier of rising car indebtedness delinquencies and repossessions often appears erstwhile household budgets are nether strain. Auto concern is simply a important portion of user credit, with much than $1.6 trillion successful balances crossed implicit 100 cardinal progressive accounts (2). (Compare that to $13.07 trillion for mortgages, $1.65 trillion for pupil loans and $1.23 trillion for recognition cards.)

When times get hard and consumers tighten their belts, the archetypal outgo they postpone is connected their recognition card, and the past 1 is connected their home. Auto loans autumn determination successful between.

But however worrying is the emergence successful delinquencies and repossessions? Is this a awesome that the larger system is falling apart, oregon is it a grounds of thing else?

A study by the Consumer Federation of America says that “auto indebtedness default rates … are climbing astatine rates that reflector the years instantly preceding the Great Recession (3).” It’s becoming wide that the system is slowing down arsenic hiring and spending person softened since precocious 2024.

In August 2025 the BLS counted lone 22,000 caller jobs and a 4.3% unemployment rate, and jobs from 2024 were revised down to 911,000 (4). The “Sahm rule,” an scale the St. Louis Fed uses to way the probability of a recession based connected however accelerated unemployment is rising, flipped to recession-on concisely past year, and has hovered adjacent to recession territory successful 2025.

Adding substance to the statement that we’re headed to recession, the Conference Board present projects existent GDP maturation of 1.6% successful 2025, down from 2.8% successful 2024 (5). Add slipping user expectations and you person a look for economical contraction successful the caller year.

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Not each indicators constituent to a existent oregon imminent recession, however. Recent New York Fed readings amusement the modulation from short-term delinquencies — those who are precocious connected a outgo but nonstop successful the cheque wrong a period oregon 2 — to radical who are much than 90 days delinquent connected a indebtedness is holding reasonably dependable (6). Though much radical look to beryllium feeling economical accent than astatine immoderate clip since the Great Recession, truthful acold that hasn’t tipped households into giving up connected paying their debts.