Vehicle repossessions in the US are beginning to “creep back up” amid higher unemployment rates, Ford Motor Credit’s finance chief has said.
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Ford’s lending unit repossessed 71,000 vehicles in the first nine months of this year compared with the 81,000 it took back for all of 2008, chief financial officer KR Kent said during a credit conference hosted by Bank of AmericaMerrill Lynch.
Higher unemployment is causing more people to miss their payments, resulting in repossessions. About 24,000 vehicles were taken during the third quarter compared with 21,000 for the same time period in 2008.
The US unemployment rate hit a 26-year high of 10.2% in October. November’s unemployment rate was expected to remain at 10.2% although White House spokesman Robert Gibbs told Dow Jones that number may be higher.
Despite the increase, Ford Credit’s repossessions remain much lower than what the company experienced in 2003 when it took back a high of 200,000 vehicles.
Ford Motor Credit has sidestepped most of the financial problems that have crippled other lending business since it stayed away from sub-prime lending.
