Mark Zane On KSNV Urges Lenders Not To Wait
LAS VEGAS (KSNV) — A perfect economic storm of inflation, soaring gas prices and the unintended consequences of the federal pandemic relief programs is closing in on many car owners.
We’re talking, on average, 15,000 repos a day nationwide,” said Mark Zane, owner of a repossession company and president of the Nevada Association of Licensed Repossessors.
Zane said repossessions were all but non-existent during the pandemic because banks were working with car owners to defer payments or help them get caught up.
Those days are ending, however, and banks are taking the necessary steps to start the repossession process on vehicles in default.
“Right now, we’re seeing a slow move because of the banks and the national lenders have to wait until their criteria is hit with default,” Zane said. “So, if the criteria of lender X was 90 days and we sent out a report, we’re in that 90-day period right now where you had a lot of people that were able to get caught up on their car because they didn’t have those old back payments.”
“We’re in the middle of waiting for the default to hit,” Zane continued. “Our big problem is we’re telling the national lenders don’t wait that long, because if you hit us and blow us up with everything that we believe is coming because of the way the economy is currently, then we’re not going to be able to service those contracts.”
While many car owners are struggling to make their monthly payments because of inflation and high gas prices, economist Mike PeQueen said the source of the problem can be traced back to the COVID-19 pandemic, when many people, flush with stimulus checks, decided to buy a car they would eventually struggle to pay for when the government money stopped.
If this were really a bad trend, we would see repossessions from across the board – people that bought in a four- or five-year period,” PeQueen said. “But it’s really just limited to that two-year period where the majority of this is which does seem to indicate that it was a strange time, which we knew. And people made strange economic decisions based on how much money they had in their pocket, which was not a sustainable amount of money.”
There is an upside, however, according to PeQueen. While used car prices soared during the pandemic, adding more inventory by way of repossession should help bring prices back down.
“A picture of repossession of automobiles above average for the next several months is not something positive for the economy, that’s for certain,” said PeQueen. “What it will do is probably take some of the steam out of the used car market,” he added. “That is probably over now with this new supply of cars coming in from the repo side of things.”
