Rising car costs are driving a surge in repossessions

(InvestigateTV) — Car repossessions were up 43 percent between 2022 and 2024 - an estimated 3.2 million cars - according to a report by Bankrate citing data from Cox Automotive.

Shannon Martin, an insurance expert with Bankrate, said the increase is largely tied to how expensive both new and used vehicles have become. The average monthly payment for a new car now sits around $700, while used car payments average about $500 a month.

“But then you put on top of that the cost to maintain that vehicle. We call that the hidden cost of car ownership; that’s another over 500 a month,” Martin said. “Americans are spending a lot of money not just to buy a car but to maintain their vehicles and keep their cars.”

For those dealing with a car repossession, Martin stressed the importance of staying calm and taking action quickly, rather than letting embarrassment prevent next steps.

“This is when you need to spring into action. First, take care of all of the most important things. Can you set up ways for you to get to and from work next week? Do your kids have a way to get to and from school? Take care of those things first,” she advised. “And then you want to see what can you do to move forward. You want to get in touch with your agent, that’s probably the second most important step.”

Martin also emphasized handling license plates and vehicle taxes, which are often overlooked after a repossession. Drivers should check their state’s requirements for surrendering license plates, as failing to do so can result in fines or even a license suspension.

In areas where vehicle property taxes apply, she said it’s important to notify the appropriate city, county, or state agency to avoid being billed for the full year on a car you no longer own.

Finally, Martin said rebuilding credit should be a priority. A repossession can significantly impact credit scores, but working with a credit counselor can help create a realistic financial plan and put drivers on a path toward