By Meghan Carey
mcarey@eagletribune.com
October 20, 2008 03:06 am Cars are disappearing from Southern New Hampshire driveways because people can't make their loan payments. But the number of repossessions isn't alarming — yet. The number of local repossessions has increased slowly over the past two years, but so has some banks' leniency in allowing late payments, experts said. It might sound too good to be true, but state Banking Department spokesman Dick Arcand said banks need payments coming in to support their cash flow — even if they're late. Nationwide, banks aren't being as forgiving. Car repossessions exceeded 1.5 million last year — a 10 percent increase over 2006, according to Thomas Webb, chief economist for the country's largest auto auctioneer, Mannheim. He predicted repossessions would jump 10 percent again this year. But locally, car dealers and repossessors said they aren't seeing as significant an increase. Husson Motors in Salem finances car loans, but banks hold the loans, employee Kerry Mens said. The bank contacts her with a list of repossessions so she can cancel the warranty on those cars. The repossession list used to come every other month and have just one or two cars on it, Mens said. Now there are usually three repossessions and the report sometimes comes monthly, she said. Husson Motors is a small company with 80 cars on the lot. But American Lenders Service Co. in Nashua, which repossesses vehicles throughout this area, has seen a more dramatic increase — it's up to 40 repossessions a month, General Manager Mike Doucette said. "What we are getting now are more toys, the all-terrain vehicles, snowmobiles, motorcycles, a lot of larger pickup trucks," he said. Repossessions on defaulted car loans started increasing a year and a half ago, Doucette said. He used to do 20 repossessions a week, but now that number has grown to 30 or 40, he said. The Plaistow Police Department marked a tremendous increase in reported repossessions during the same time period, according to Deputy Chief Kathleen Jones. Under state law, repossessors have to report to police within two hours of repossessing a car. There have been seven repossessions in Plaistow so far this year, and there were eight at this time last year, Jones said. But over the same time period in 2006, she said there was just one repossession reported. Jones said she foresees that number jumping again soon. "I anticipate probably if we check this again in five, six months, we would probably find more," she said. "It's just another face of the economic times." But some banks aren't repossessing cars because they, too, are suffering with the economy. Jerry Little, president of the New Hampshire Bankers Association, said everyone is struggling with debt. Rather than repossess, some New Hampshire banks are trying to establish workable payment schedules, he said. "It behooves them to work with people than to take back more product," he said. "There are a lot of used cars and new cars out there ... losses are generally going to be higher with repossession." Doucette is finding that the case. Once his company has picked up a repossessed vehicle, he holds it until the lender decides what to do with it. Under state law, the person in default on the loan has 20 days to make payment and get the vehicle back. If they don't, the banks send the vehicles to auction. But Doucette said banks appear to be giving loan recipients more time to make up the delinquent payments. Vehicles used to be on his lot for the required 20 days, he said, but now they're there for at least a month. "I do find that the banks are more lenient lately," he said.
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