Repossession activity slowed this spring as the coronavirus pandemic raged across the U.S., with several state governors declaring the practice nonessential in much of the country.
As repossessions resumed, however, auto lenders likely benefited from boosts in used-vehicle values. That's because, aftermarket experts say, flipping cars for higher values this summer may have helped lenders write off fewer losses and reduced the remaining balance for customers with repossessed vehicles.
What started as one of the strongest selling seasons in years fell apart in a matter of weeks because of the pandemic. Auction lanes and dealerships closed on governors' orders and car shoppers stayed home. In mid-April, used-vehicle values plunged by double digits. Emergency legislation and executive orders also paused vehicle repossessions in several states, which stayed in place for months.