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Roadblocks and Solutions: Understanding Auto Repossession Delays

From Moratoriums to Market Fluctuations to Disappearing Agents — a Lender’s Conundrum

Auto repossession, the process of reclaiming a vehicle from a borrower who has defaulted on their loan payments, has become a more challenging and time-consuming process in the current environment than ever before. Why?


Let’s explore some of the reasons the repo man is taking far longer these days than what we’re accustomed to — and what this means for auto lenders.

  • Lingering Effects of COVID-19: The many disruptions related to the pandemic caused significant challenges to many industries, including the auto lending and repossession sectors. Business closures, reduced staff, and health concerns among repo agents during the height of the pandemic led to a slowdown in the repossession process.

  • Moratoriums on Repossessions: Many localities implemented moratoriums on repossessions to provide financial relief to borrowers facing hardships during the pandemic. While these measures were necessary, they resulted in delays for lenders who would have otherwise proceeded to reclaim vehicles from defaulting borrowers.

  • Closure of Repossession Companies: Many repo agents and repossession companies could  not outlast the many obstacles of the pandemic era. In fact, it’s estimated that 30% of repossession companies closed permanently during this time due to these financial challenges. As a result, there are now far fewer repo agents available to handle the now-increasing demand for repossessions.

  • Shortage of Repossession Lots: As repossession companies shuttered, their lots had to shut down or were repurposed for other uses, reducing the number of secure locations to store repossessed vehicles. The limited availability of storage lots adds to today’s logistical challenges for repo agents and lenders. In other words, not only are there fewer agents to go get the cars, there are fewer agent lots to put the cars on!

  • Overwhelming Demand: As the pandemic's impact wanes and economic conditions continue to improve, repossessions are rebounding, creating a surge in demand for repo services. With fewer agents and lots, the number of repossessions now exceeds the capacity of available resources, causing further delays. Agents now have more requests for repossessions than they have the capacity to fulfill. To give an example of how competitive this landscape has become, Wells Fargo and Toyota Financial Services (TFS) have begun offering incentives of hundreds of extra dollars to repossession agents to pick up their cars first.


  • Pressure to Repossess Before Depreciation: The pandemic also led to a significant increase in demand for used cars. Due to chip shortages for new cars, manufacturers were unable to produce vehicles in sufficient numbers to meet demand. This led to scarcity in the new car market, driving prices significantly higher and causing many new car buyers to turn to the used car market. In addition, many people lost their jobs or had their income reduced during the pandemic, and when they needed to purchase a car, they sought used cars as a more affordable means of transportation. This ultimately led to a shortage of used cars on the market, which increased their value and inflated the prices paid by consumers.

    Today, used car prices have cooled down from their peak in 2022. Though they have rebounded from the low experienced in early 2023, the long-term expectation is that used car prices will continue to decrease. Moreover, as vehicles age, they steadily lose between 1% to 1.5% of their value every month, adding to the urgency of repossessions. In order to maximize their recovery, lenders are under pressure to repossess cars now, before their values depreciate further, ensuring they can recover maximum value.

  • Industrywide Strain: The challenges faced in auto repossessions are not isolated incidents related to the performance of any specific repossession company or other entity. These delays are endemic throughout the entire market, affecting all lenders and repo agents due to the complexities introduced by the pandemic and subsequent market fluctuations.

In today’s complex and adjusting economy, the best solution is for lenders is to work with trusted partners who are well aware of these challenges and who are willing to work together to find alternative solutions to address default on auto loans. At State National, we pride ourselves on going the extra step at every step — and are working closely with lenders to ensure that repossessions are as timely and expedient as possible. We are in your corner and committed to serving you by remaining flexible and adaptable to tackle any challenges that may arise in the repossession process.

Angie Rowe
Angie Rowe
Angie Rowe has been with State National Companies for over 30 years and currently serves as the Director of Claims. With 25 years in Lender Claims, Angie has consistently provided a seamless and efficient process for clients and partners and has extensive knowledge in repossession and remarketing services.

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Roadblocks and Solutions: Understanding Auto Repossession Delays

From Moratoriums to Market Fluctuations to Disappearing Agents — a Lender’s Conundrum Auto repossession, the process of reclaiming a vehicle from a borrower who has defaulted on their loan payments, has become a more challenging and time-consuming process in the current environment than ever before. Why?

How Much Money Can We Save You? 4 Questions to Find Out

Protecting your auto loan portfolio doesn’t need to cost your credit union, bank, or finance company as much money, time, and resources as it does today. With seamless implementation and a multitude of unique advantages in our service model, State National saves lenders money. Just how much? Let’s find out! 1. How many auto loans do you have in your portfolio and how much time per week does your staff spend on managing collateral protection in your current portfolio? Our program is built to free up your staff’s capacity and provide you with FTE savings. Our exclusive lender platform, InsurTrak, has every tool you need, including: Real-time data on borrower insurance status, notifications sent, account history, insurance documentation, and all borrower interactions Instant, on-demand access to all recorded borrower phone calls. Fast, automated payment change and refund information On-demand management reports and customized, transparent reporting of all aspects of your program Created in-house and customized for CPI programs specifically, InsurTrak is the industry powerhouse in tracking, claims filing, reporting, and program management, all in one user-friendly, easy-to-use platform. “Efficient? I’d estimate State National’s system saved us 6 figures and 1 FTE!” ~ Steve McIntire, VP of Administration and General Counsel, SELCO Community Credit Union 2. What is your 12-month claim benefit? State National returns, on average, 20% more in claim dollars than other providers. Because we are the carrier, underwriter, and claims payer, there is no middleman and almost no paperwork required. Many claims are processed in 10 seconds with AI and those that need further review are paid within 5 days of their submission date. That’s 5 days start to finish. Additionally, filing a claims payment has never been easier for your team. Our claims form comes pre-populated with data from InsurTrak. You don’t even have to decide which claim type you want to file — we automatically process each claim for ALL available coverages, regularly returning more dollars to you. Did I mention we have broader coverages that provide more value to the financial institution? Not only that, but we offer a borrower-centric coverage that allows your borrower to file a claim even if they are uninsured! “State National has saved us a truly significant amount of money.” ~ John Grimes, AVP of Collections, MAX Credit Union 3. If you have a CPI provider, what is your current CPI penetration? We reduce CPI penetration by 20-30% because of our proprietary AI tracking software, proactive verification methods, and our email and text programs. Our Web-Based Robotic Automated Processing (WRAP) software automatically extracts insurance information from insurer websites and updates it in InsurTrak — without any human effort or intervention. WRAP uses AI and machine learning to proactively search for new policy information from seven different carriers, including the country’s top five auto insurers, before ever notifying a borrower. Only if we can’t verify insurance through WRAP or our other proactive and behind-the-scenes verification methods do we reach out to the borrower via multiple channels, including email and text. Borrowers can easily respond through the channel they prefer — email, phone, or our borrower-facing portal. They can even send an image of their insurance information by text! All this combines to create a more seamless, frictionless experience that results in lower penetration rates and greater client and borrower satisfaction. “Even though State National provides the insurance, I know their goal in the end is to NOT have forced placements. It's an active partnership that hits from all angles.” ~ Lora Stebleton, Vice President of Payments & Customer Service, Gate City Bank 4. What core processor do you use? InsurTrak is engineered to work seamlessly with all major core processors. Because innovation is our mindset, we have multiple automation options available to accommodate your systems and processes. When designing InsurTrak, we kept software compatibility a top priority. This means seamless real-time premium adds, refunds (including partial refunds), and payment syncing. With minimal steps to set up, you can link Symitar Episys, Temenos, and AKUVO directly to InsurTrak. For those who use Symitar Episys, State National has set up two-click direct connectivity, allowing all InsurTrak data to be accessed through your Episys system. Temenos and AKUVO users can easily connect to InsurTrak within their frameworks using the State National connector. “I just don’t think anybody else out there can compete with what State National has as far as the product, the technology and innovation, and how many things are automated.” ~ Corey Rupp, Chief Retail Officer, Affinity Plus Credit Union Switch Without a Glitch Once you decide to partner with State National, our dedicated Program Implementation Team is there to guide you all along the way and answer any questions you may have during any step as you onboard. “It was the best implementation I have done with any company. It was flawless.” ~ Joy Dominguez-Mota, Department Manager, Nationwide Acceptance Want to determine the actual savings your financial institution can achieve with these advantages? Let us know your answers to these questions and see how you can take advantage of these and other exclusive benefits. Sign up for an in-depth, customized consultation and program review today to see how much time and money we can save you!