Elizabeth Warren launches probe into booming car repossessions

New York (CNN) — The car repo business is booming as Americans fall behind on increasingly expensive car payments.

Cars are being repossessed at the highest rate since the Great Recession of 2008 and 2009. The repo tactics have drawn the attention of Massachusetts Sen. Elizabeth Warren, who launched a probe into the auto lending industry on Wednesday, a Senate Banking Committee spokesperson told CNN.

The investigation is focused on illegal and mistaken repossessions, when cars are seized even if borrowers are current on their bills or have reached agreements with lenders.

Warren, a Democrat, sent letters to a dozen major industry players including Chase Auto, GM Financial, Toyota Financial Services and Ally Financial on Wednesday as part of the probe. She sought information on repo activity, error rates and practices.

“Car repossession is a devastating disruption to someone’s life – and it is inexcusable when that repossession is in error,” Warren wrote in the letters, which request responses by February 16. Because Democrats are in the minority, Warren has no subpoena power and responses will be voluntary.

Historically, the Consumer Financial Protection Bureau (CFPB) has served as a watchdog against illegal repossessions. The agency fined Wells Fargo $1.7 billion in 2022 for, among other things, allegedly illegally repossessing vehicles.

However, the Trump administration gutted the consumer watchdog and sought to shut the agency altogether this past year.

“The Trump administration has kneecapped the agency’s ability to protect consumers from auto repossession errors,” Warren wrote in her letters to the auto lending companies.

The CFPB did not respond to a request for comment. CNN reached out to the major auto lenders and trade associations addressed in Warren’s letters, including the American Recovery Association, National Independent Auto Dealers Association and American Financial Services Association. Chase declined to comment.

‘Devastating and deeply disruptive’

Car repossessions have been rising in recent years amid broader affordability concerns. Typically, borrowers prioritize making their car payments over almost all other payments because they need their cars to get to work.

“Having a car repossessed is a devastating and deeply disruptive experience,” Warren wrote to the auto companies. “Losing access to a car often means losing a paycheck.”

In 2024, 1.73 million vehicles were repossessed – the most since 2009, during the Great Recession, according to data from Cox Automotive and Experian.

Repossession data for 2025 is not available, but an executive from an industry trade group previously told CNN that repo volumes are close to Great Recession levels.

“It’s a target-rich environment at the moment,” George Badeen, who also runs Midwest Recovery and Adjustment in Detroit, said in an interview in October.

$50,000 average car price

Today, Americans face a punishing one-two combination of high car prices and expensive borrowing rates.

The average transaction price (ATP) on a new vehicle hit $50,000 for the first time ever last fall, according to Kelley Blue Book. The high prices partially reflect the disappearance of cheap models for new car buyers to choose from.

And even used cars are expensive: The average used car was listed at $26,043 in December, up nearly 3% from the year before, according to Cox Automotive.

Car loans rates also remain high despite last year’s interest rate cuts from the Federal Reserve.

As of December, the average used vehicle annual percentage rate (APR) stood at 10.5%, according to auto research firm Edmunds. New vehicle APRs were 6.5%. Both have come down a bit recently but remain elevated.

Highest subprime delinquency rate on record

Faced with high payments, some borrowers are falling behind on their bills. This is especially a problem among subprime borrowers, those with weaker credit scores.

The subprime delinquency rate – which measures the share of loan balances that are at least 60 days late – climbed to 6.74% in December, according to Fitch Ratings. That’s the highest on records that go back to the early 1990s.

“The rates of delinquencies and repossessions in the auto market is a blaring alarm that American consumers are hurting financially,” Warren wrote.

Ed McFadden, a spokesperson for the American Financial Services Association, said in a statement that the trade group is reviewing Warren’s letter and its member companies “make every effort” to work with borrowers.

“Vehicle repossessions are a process of last resort that are in the interest of neither the borrower nor the lender,” McFadden said.

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