While Economy Slides, Repo Business Booms

Culver City, CA (AHN) -- As money becomes scarcer and scarcer, one business that is picking up exponentially is the repossession business - as there's lots of people who can't afford their cars and boats anymore.

Times are hard, gas prices are high and the real estate market continues to down-spiral. Layoffs are becoming more and more frequent. Thus is the nature of a recession, where luxuries one day become out of reach the next.

Between 2000 and 2006, the real estate market flourished, and what better time to refinance a home than during a boon in the business. Boating recreational sales rose 40 percent, while other folks took out an average loan amount of $141,000.

But as we slip further and further into recession, those loans are becoming insurmountable for folks in the middle class. In a New York Times article, one company, Harrison Marine, told of hiring 13 people - specifically to rain on the parades of over-stretched recreational boaters who have fallen behind on their duties to the bank.

Business owner Jeff Henderson told the Times he is repossessing an average of one boat a day. His job is to find customers who are trying to hide both themselves and their boats from the bank - and seize them forcefully.

Repossession of cars has also reached a critical high. Ever since 2001, there has been a gradual increase in the amount of pick-ups towing companies have had to make on behalf of the bank, to resecure cars after a loan is defaulted on.

Autolenders pay up to $500 to towing companies to secure their automobiles. This price is a fine motivation for the hours the job entails - 2 a.m. to 5 a.m. are the peak hours for repo men. The idea is simple: get in and get out with the goods before anyone notices.

Another factor in the increase of repossession is impatience on the part of lenders. According to an interview with Minnesota's Pioneer Press, Bobbie Britting, a consumer lending analyst with TowerGroup, said auto lenders are not waiting as long as they used to on delinquencies.

Fuel prices - in some cases - have made owning a vehicle twice as costly as it was in 2000. According to the Energy Information Administration, average diesel prices have gone from $1.07 in May 1998 to $4.50 - an increase of 420 percent in 10 years.

As costs increase and the economy decreases, more and more people and businesses are just falling behind.