ATLANTA — More Americans are falling behind on their car payments as 2025 comes to a close, with auto repossessions nearing levels not seen since the Great Recession.

WSB consumer expert Clark Howard says the number of vehicles being repossessed across the country is rising at an alarming rate.

“We’re having a level of auto repossessions virtually unprecedented,” Howard said.

Experts say the trend is being driven by soaring vehicle prices, rising insurance costs, and longer loan terms that leave many drivers struggling to keep up. Bankrate’s Shannon Martin says both new and used cars remain historically expensive.

“Of course we have record high vehicle prices; not just new cars but also used cars,” Martin said.

She says the true cost of owning a car goes far beyond the monthly payment.

“Insurance rates have skyrocketed over 30% over the last couple of years, and then the cost of maintenance has increased,” Martin said.

Howard says longer loan terms may seem like a solution, but they often make the problem worse.

“We’ve created a trap with more expensive vehicles tied into ultra-long loans leading to people not being able to make their payments,” he said.

Howard adds that automakers need to refocus on affordability.

“Vehicle prices are just too high. The average new vehicle in the U.S. is now over $50,000,” he said.

Even with higher prices, new car sales are up this year. At the same time, repossessions are also increasing, something that can severely damage a borrower’s credit.

“It is a big hit; a repossession can hit your credit score by over 100 points,” Martin said. “That’s just the repossession itself, not accounting for missed payments over months or years.”

Howard says the situation has grown so severe that new facilities are being built just to store repossessed vehicles.

“Believe it or not, new secured fenced facilities are having to be built just to park all of the repo’d vehicles,” he said.

Experts estimate more than three million vehicles could be repossessed nationwide before the end of the year.

Martin says anyone struggling to make payments should act quickly.

“The best course of action is to get in touch with your lender before you miss that first payment,” she said. “That way, you may have the chance to refinance your loan.”

She also urges buyers to think about the total cost of ownership, and not just the monthly bill as affordability continues to be a growing issue in the auto industry.

WSB Radio’s Jennifer Perry contributed to this story.