March 26, 2009 1:04 PM
- Text
Booming Business For Car Repo Men
(CBS)
A growing number of Americans face life without their cars because they can't make the payments.
The number of auto loans that have gone unpaid for 60 days hit a 10-year high in the last three months of 2008 - up 17 percent from the year before.
When those loans go into default, all those cars have to be repossessed. CBS news correspondent Hari Sreenivasan provides an inside look:
It's midnight and the repo man is just starting his shift. First stop; a gold Hummer.
According to the bank, the owner of the car had his home foreclosed. When he wakes up, he'll find out the hard way what happens after missing one too many payments on his luxury SUV.
"It's the American way," said Richard Grosvenor, of the repo firm Speedy Recovery. "We wanna live beyond our means. We wanna drive the luxury cars."
Grosvenor has been repossessing vehicles for 15 years. He earns paid roughly $400 per car, and when the economy slumps, business soars.
"When we see the paperwork come across our desk and the amount that these people were trying to afford in their payment, I guess nowadays with the crunch, to me it just seems impossible," he said.
Jackie Charles felt that crunch. Making less than $30,000 a year, she had to make a tough choice.
"I had to choose between paying the car note and paying my rent," she said.
She chose rent, fell two car payments behind, and her Honda was repossessed.
"I started screaming, to be honest," she said. "They took the car the very week I started a new job."
Charles is not alone. Banks repossessed than 1.6 million vehicles last year, the highest number ever, and 12 percent more than the year before.
There is a good chance those cars will end up at auto auctions - where volume is up and the cars seem to move through like cattle.
Those 1,200 cars can spell savings to the dealers bidding on them. For example, a 2007 Toyota Corolla might sell for close to $10,000 at auction. A dealer can then resell it for $14,000.
And after those cars are back on the road, repo men like Richard Grosvenor hope the new owners did not buy more than they can afford.
The number of auto loans that have gone unpaid for 60 days hit a 10-year high in the last three months of 2008 - up 17 percent from the year before.
When those loans go into default, all those cars have to be repossessed. CBS news correspondent Hari Sreenivasan provides an inside look:
It's midnight and the repo man is just starting his shift. First stop; a gold Hummer.
According to the bank, the owner of the car had his home foreclosed. When he wakes up, he'll find out the hard way what happens after missing one too many payments on his luxury SUV.
"It's the American way," said Richard Grosvenor, of the repo firm Speedy Recovery. "We wanna live beyond our means. We wanna drive the luxury cars."
Grosvenor has been repossessing vehicles for 15 years. He earns paid roughly $400 per car, and when the economy slumps, business soars.
"When we see the paperwork come across our desk and the amount that these people were trying to afford in their payment, I guess nowadays with the crunch, to me it just seems impossible," he said.
Jackie Charles felt that crunch. Making less than $30,000 a year, she had to make a tough choice.
"I had to choose between paying the car note and paying my rent," she said.
She chose rent, fell two car payments behind, and her Honda was repossessed.
"I started screaming, to be honest," she said. "They took the car the very week I started a new job."
Charles is not alone. Banks repossessed than 1.6 million vehicles last year, the highest number ever, and 12 percent more than the year before.
There is a good chance those cars will end up at auto auctions - where volume is up and the cars seem to move through like cattle.
Jason Brinkley of Adesa Auctions says his company is auctioning around 1,200 cars a day.
Those 1,200 cars can spell savings to the dealers bidding on them. For example, a 2007 Toyota Corolla might sell for close to $10,000 at auction. A dealer can then resell it for $14,000.
And after those cars are back on the road, repo men like Richard Grosvenor hope the new owners did not buy more than they can afford.
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