Vehicle repossessions reached an all-time high in 2008, and one industry analyst predicted they will continue to rise in 2009.
Tom Webb, chief economist at vehicle auction giant Manheim, said a record 1.67 million cars and trucks were repossessed in 2008. That is 12 percent more than in 2007.
He said another increase is likely in 2009.
They will certainly be up in first half of this year, and with the labor market deteriorating so substantially, it might be up quite a bit and might offset the decline I expect in the second half of the year, Webb said during a conference call with analysts and reporters today.
We wont have a 12 percent increase, but I would expect something in terms of less than a 5 percent increase, he said.
Webb said he expects wholesale used-vehicle prices this year to stabilize or rise somewhat as the credit freeze shows signs of thawing.
But bloated new-vehicle inventories hurt used-vehicle values last month. The Manheim Used Vehicle Value Index in December stood at 98.0, down from 98.3 in November and 110.2 in December 2007.
It was the indexs biggest annual decline since it began in 1995, Webb said. The index is adjusted for vehicle make and model and time of year.
Though wholesale prices of large SUVs and pickups in December were still well below their December 2007 values, those segments showed significant price increases when compared with last summer. Conversely, wholesale prices of compact cars declined in December when compared with prices last summer.
Webb attributed the price movement in part to market correction and to a reduction in gasoline prices. He said some dealers report that their new-vehicle inventories are short on trucks and heavy on cars, which also helps explain used-vehicle price shifts.
He also said:
New-vehicle sales to rental companies declined 20 percent to just over 1.5 million in 2008, the lowest rate since 1997. He said sales to rental companies would not rebound any time soon.
The number of new vehicles sold through leases in 2008 dropped below 2 million for the first time in a decade.