Riding with the repo man (update)

7:15Hannah Ameer:And Rick says part of the reason we are seeing more and more people fall behind on their car payments is that there are more and more questionable subprime auto loans.

7:23Carmen Boulanger:A lot of lenders have gotten very loose. They have been extending credit and extending terms and extending money to individuals that probably shouldn't have had those terms of those loans and been able to buy those vehicles.

7:36Sarah Gonzalez:That, Rick says, is the irresponsible way to be a subprime lender.

7:40Hannah Ameer:And you'll hear stories about this. Companies stuffing people into expensive, crappy used cars, wringing out as much money as they can, repossessing the car, even garnishing wages.

7:50Sarah Gonzalez:Rick says there is a responsible way to be a subprime lender, and that is to think about the next car a customer with bad credit is going to buy. If Rick hands that person a lousy loan for an unaffordable car, he's going to have to repossess that car and wreck that customer's credit, which is bad for future business with that customer.

8:11Carmen Boulanger:Oh, my gosh. Me as a dealer, I want them to make the payment. I want that car to get them where they need to go. I want their credit reestablished to where we can get them in a prime loan and really get someone back on their feet.

8:23Sarah Gonzalez:The subprime auto loan market is a critically important market when it is working well, because people with bad credit and without a lot of money still need a car to live their life, to go to work. And without subprime, they would not be able to get the money to get that car.

8:38Hannah Ameer:And it's worth underscoring that the vast majority of people in this country with subprime loans are not defaulting on those loans. At least 92 % of people who got subprime auto loans are paying them off on time. Or at least they're not seriously behind on payments.

8:52Sarah Gonzalez:We asked Rick how many of the subprime loans his company issues result in repossession. And compared to other lenders, it is a low number.

9:01Carmen Boulanger:I'm going to sound really nerdy because I think it's exactly 6 % over the past two years consistently.

9:08Sarah Gonzalez:So that is 6 % of people given a loan and then a car and then it doesn't work out. That is very bad for that group of people, like not good for their life. It's bad for their credit. Is there a way to avoid that? Just get that number down to zero?

9:24Carmen Boulanger:Yeah, but one of the ways – so if we did that, that would mean that we're basically declining and just telling people we aren't going to give them a loan. Right. So, you know, as long as we want to play in that field of lending, there's always going to be some form of repossessions. There's just no way around it.

9:44Sarah Gonzalez:But also, Rick says, there's no surefire way to predict who is going to default and who isn't. Credit scores don't tell you if somebody is going to be in the hospital in a year or lose their job.

9:56Hannah Ameer:There's just no perfect way to predict what's going to happen in somebody's life when they walk into a car dealership.

10:01Sarah Gonzalez:Can I ask a question before you go to the dealership?

10:04Hannah Ameer:Okay. Chapter two, the driver.

10:06Sarah Gonzalez:So what car do you have in that moment?

10:08Hannah Ameer:I believe it was a 2007 Ford Explorer. Okay. A nice car. Yeah, and it had almost like 400 ,000 miles on it. Yeah, that's... Driving a Ford Explorer that's shaking a little bit, you tend to want to get something different. Oh, was it shaking a bit? Oh, yeah. Hit that 70 miles per hour mark on these highways. It gets a little sketchy. Stephanie Waldrop lives in a small town in Mississippi. She's 23 now, and a year ago, she was working at a fast food fried chicken restaurant.

10:36Sarah Gonzalez:She'd been there for a while, started as a cashier, moved up to shift leader, then to manager.

10:40Hannah Ameer:So you got this new job, and I imagine it came with more pay. Yes, honey, it did. So you were making pretty good money. It was great money. Look, it was money that I didn't understand what to do with. Stephanie was making$4 ,000 a month, and she kind of did understand what to do with it. Upgrade her crappy Ford Explorer.

10:59Sarah Gonzalez:Did you have a dream car in mind?

11:01Hannah Ameer:Well, you know, I'm a very, not really simple, I'm complex, but simple at the same time, you know. I'm very much an SUV person.

11:09Sarah Gonzalez:Okay.

11:09Hannah Ameer:So I wanted a Ford Flex.

11:12Sarah Gonzalez:We had to look up the Ford Flex, and it is an unusual looking car to pick as a dream car. To me, it looks like a hearse, and I think that's kind of cool.

11:21Hannah Ameer:So therefore, I wanted that. Like, I'm kind of gothic, you know, but I'm actually quite bubbly sometimes. I'm so. Bubbly gothic is the best way to describe you? Yeah, yeah, I'm a bubbly goth. So just before her birthday, Stephanie drives her shaky Explorer to a dealership in Mississippi.

11:38Sarah Gonzalez:Salesman there says, bad news. Stephanie, we cannot get you a loan for the Ford Flex because you've got bad credit. Stephanie can't remember her exact credit score, but she says ballpark was like 600. Not great.

11:52Hannah Ameer:But the good news? This dealer could still get her a subprime loan for a different car. a used Ford Fusion. You know, it was red. Like, that's my favorite color. Being colorblind, that's the one color I could see very well. So that's why I wanted that red car. I was like, it is red, so let's go for it.

12:10Sarah Gonzalez:Now, let's just talk about the terms of subprime auto loans for a second, because Stephanie was not going to get a favorable loan, to say the least. This was about a$12 ,000 used car. Her interest rate on the loan was going to be 23%. So with fees and taxes, her payment was going to be$466 per month for 48 months. And she was going to end up paying almost double the sticker price of the car.

12:38Hannah Ameer:Some people say this is why subprime is predatory. But others say this is kind of the deal. This is what it costs to cover a higher risk of default when someone has bad credit.

12:48Sarah Gonzalez:But these are the kinds of terms on subprime auto loans. Interest rates in the high teens, low 20s, and sometimes they'll be stretched out for seven or even eight years.

12:59Hannah Ameer:So Stephanie's looking at a car that's not her dream car and thinking it's better than the shaky Ford Explorer.

13:06Sarah Gonzalez:She's looking at a loan that is definitely not her dream loan and thinking, I mean, I can't afford it. $4.66 a month? I make$4 ,000 a month? Okay, let's do this. And over the next year, she made her payments. She kept working at that fast food restaurant, making great money. But she says there were things at that job that just started to take a toll on her.

13:30Hannah Ameer:I am a transgendered woman. So there's a lot of discrimination that comes along with that. It just kept happening more and more frequently. I had a couple workers there that would call me it. And then the guests, the customers and stuff that would come into the store. It was something else. I mean, they would sit there and just ask, what are you? Blankly just ask that. And so it started weighing on me. For a while, I was like, I don't really care. But in the back of my mind, it really weighed on me really hard.

13:59Sarah Gonzalez:Eventually, she says it was just too much. She found a new job that was better for her, and she quit the restaurant. The problem was that this new job, it paid a third of her old salary. She knew there were going to be huge trade-offs, including that expensive auto loan.

14:17Hannah Ameer:When it comes to your mental health and something that's material, the mental health outweighs material any day. So Stephanie missed her first payment, and the finance company starts calling. They're calling asking what I'm going to pay, and they'll just sit there and pressure me and like, well, we need you to pay something now. I'm like, well, when the manna from heaven falls, then I'll pay you.

14:41Sarah Gonzalez:It's like, it's kind of hard right now. After three months, Stephanie was about two and a half payments behind. That is when her lender decided they wanted the car back.

14:50Hannah Ameer:It was the morning, a weekday. She had the day off from her new job, and she was in her kitchen. I'm there at the dishwasher, bringing dishes in there, cleaning up afterwards. And our window points straight towards the driveway. And I see this white tow truck hooked up to my beautiful red car.

15:08Sarah Gonzalez:Oh, no.

15:09Hannah Ameer:And I'm like, uh, I was telling my boyfriend, I was like, I have a situation. Like I was freaking out. I was like, no, no, no, I'm not that far behind. Why are you taking my car?

15:22Sarah Gonzalez:But I mean, it must cross your mind that you're like, this is what happened, I guess, when I skipped those payments.

15:27Hannah Ameer:Yes, it's like, this is what happened when I laid this down in order to pick up another part in my life.

15:36Sarah Gonzalez:So you're 100 % sure this is the right car?

15:38Carmen Boulanger:Huh? Oh, yeah.

15:41Hannah Ameer:Chapter 3, The Repo Man When we met Larry Baker, it was about 9.30 at night. He was waiting for us in his tow truck, which was parked in front of his boat, which is named Final Notice.

15:55Carmen Boulanger:And the final notice on the boat means if I come, I'm your final notice. Ready to load up?

16:00Sarah Gonzalez:Yeah. Larry's wearing an Ohio State crew neck sweatshirt. He's got a small hoop earring. He smokes Pall Mall cigarettes, but he's trying to quit. and at least tonight, his radio was tuned to the classic rock station in Columbus. You like this song? Yeah. It's the best. Guns are rooting.

16:17Hannah Ameer:We rode along with Larry from 9.30 p.m. to around 1.30 in the morning.

16:22Carmen Boulanger:This time of night, I always get coffee. You guys drink coffee or no? Oh, yeah. Okay, Speedway Coffee's the best. Wait, really? Oh, my God, yes.

16:31Sarah Gonzalez:Speedway Coffee, that is repo lesson number one. Here is what else you'll learn over the course of four hours with a veteran repo guy.

16:39Hannah Ameer:Lesson two, do your repossessions in the middle of the night, because if people are sleeping, there will be less conflict. But that doesn't mean zero conflict.

16:47Carmen Boulanger:Yeah, that's, I didn't bring it tonight. That's why I carry a.45 automatic.

16:50Sarah Gonzalez:How many times have you had to pull a gun? Twice in 15 years. And you've had a gun pulled on you? About four times. Okay. But lesson number three, most people are good. And remember, you are meeting them at one of the worst moments in their lives.

17:07Carmen Boulanger:You know, when they treat me with respect, you know, I have a heart too. So there's been times where I've left cars, you know. Finance company wanted me to get a car and, you know, I looked at the paperwork. They only owed 300-some dollars. And I thought, you know what, this car really is a piece of junk car. The poor girls paid for it for, you know, two years. I just left the car.

17:29Sarah Gonzalez:I told her to go hide it. The repossession business has changed dramatically over the course of Larry's career. He's been doing this for more than a decade, and here's how he says it worked when he started. A lending company would get in touch and say, Hey, Larry, so-and-so stopped paying. We need her car back.

17:48Hannah Ameer:So in those olden days, Larry wouldn't get much more information than that. A name, an address, a phone number. But maybe so-and-so moved. Maybe she isn't picking up her phone. Now what?

17:59Sarah Gonzalez:Larry then had to become like a kind of detective. He would go on the social media of the day, MySpace, and he would see if so-and-so was posting pictures of herself. What's in the background of the picture? Does Larry recognize it? Can he drive there? Maybe the car's there.

18:14Hannah Ameer:He'd also check databases to find other addresses, other phone numbers. And if that didn't work, he'd try to find so-and-so's family members and just start making phone calls.

18:24Carmen Boulanger:You have to do a little trickery. and I might call a cousin and say, hey, this is John from Renna Center. Your cousin so-and-so came in to get a widescreen TV. We want to get it delivered to her, but we need to verify three pieces of information. So now I got our new address.

18:44Sarah Gonzalez:Are you allowed to do that? Yeah. I mean, I'm not going after the person that I'm talking to. If he wants to volunteer the information, then that's on him. Okay. The point here is that those were the old MySpace days when it was a ton of work to track down somebody's car. And there was a decent chance that Larry would never find so-and-so's car and the lender would just be out of luck. They'd never get it back.

19:11Hannah Ameer:So you could imagine, lenders were a little more reluctant to give out subprime loans back then. But things have changed. It's gotten way easier to get a car back.

19:21Sarah Gonzalez:All right, so what's next? Okay, I'll show you. Larry pulls out this iPad to show us the next car on his repossession list. It's a black Chevy Cruze. The car was bought with a subprime loan. The buyer has stopped paying. But here is the catch. Nowadays, Larry says, part of the deal when you buy a car with a subprime loan is that the lender is going to stick a GPS tracking device onto your car.

19:47Hannah Ameer:So now, Larry doesn't need to go on MySpace or fake a phone call. He just opens up an app on his iPad and punches in this car's GPS number.

19:56Sarah Gonzalez:GPS don't lie. Okay. So we'll ping it. Oh, you like, we pulled up the live GPS here? Yep. Up pops a map that shows a little dot in a pretty nice neighborhood. This is where the car is.

20:08Carmen Boulanger:Yep, that's where it's at. What if it's in the garage? It's not. This thing pings pretty much accurate. It does seem like your job is much easier now. Oh, yes.

20:16Hannah Ameer:Larry says finance companies now know that if they issue a risky loan, It's going to be much easier to get their car back if someone stops paying.

20:24Sarah Gonzalez:And that is definitely a part of the reason we are seeing more subprime auto loans. When you know you can get the car back, it is that much less risky to issue the loan. And it is amazingly easy to find a car this way.

20:37Carmen Boulanger:It's right there.

20:38Sarah Gonzalez:This is, in fact, the car we were repossessing at the very beginning of the episode. Larry is running around the driveway, hooking this Chevy Cruze up to his tow truck.

20:51Sarah Gonzalez:All right, so it's like 1 in the morning. We were standing in someone's driveway. As far as we can tell, they're asleep. This is, like, legitimately... Larry, do you not dread somebody waking up in the middle of this? It doesn't scare you?

21:05Carmen Boulanger:If they do, I just tell them something, you know, I explain to them. I just tell them, you know, sorry, you know.

21:12Sarah Gonzalez:Larry trails off. He's focused on his actual job, which is getting into his truck, pressing a button that pulls the Chevy into the tow position. Nobody wakes up. Nobody runs into the car. Larry hits the gas, and he drives away.

21:28Carmen Boulanger:Say adios. That's it? That's it. Call me tomorrow.

21:32Hannah Ameer:Is this what a normal repo looks like for you, Larry?

21:35Sarah Gonzalez:Yep.

21:36Hannah Ameer:Five minutes?

21:37Sarah Gonzalez:Five minutes. It would genuinely be miserable to wake up and not have your car the next morning. That person might have to go to work, right? Well, yeah.

21:43Carmen Boulanger:I mean, it is. I mean, I feel for some people. I really do. You know, taking somebody's property and, you know, making them, you know, stranded. You know, they could have, you know, a couple kids and you're really going through some hard times. I mean, we've even taken a car and gave them money, you know, because they didn't have any money to catch a bus. They had to go to work or catch an Uber. You know, we all have to pay our bills. This is how I pay my bills. This is how I, you know, feed my family. So it's just a job.

22:14Hannah Ameer:Millions and millions of Americans are on the verge of having their car repossessed. Some people are calling this a subprime auto crisis.

22:21Sarah Gonzalez:But look, this is a different kind of crisis than the subprime mortgage crisis of 2007. There are a lot of reasons why, but probably the simplest is that there is just way less auto debt. The mortgage market was and still is much, much bigger than the auto loan market. That said, an auto repossession is clearly a crisis when it is your car being taken.

22:46Hannah Ameer:After the break, what really happens after a repossession?

23:02Hannah Ameer:Yes, yes it is.

23:04Sarah Gonzalez:When the day came for her car to be repossessed, Stephanie Waldrop says she actually recognized the repo guy. He used to come into her chicken restaurant when she worked there. He was a nice guy, she says, even gave her time to clean out her car, grab her beloved umbrella. It's wonderful. It's huge. It's just black. It's just massive. It's like a funeral umbrella. This is your gothic side. It's like a funeral.

23:25Hannah Ameer:Yes, it's the gothic side coming out. One of Stephanie's goals with that car was to build her credit back up. But the repo has not been good for her credit score. It dropped like a bad habit, honey. How did you feel when you saw your credit score? I was a little offset. You know, I was put back a little bit.

23:44Sarah Gonzalez:But it's like, I'm going to fix this. And technically, she still does have time to fix this. Here's the situation. Stephanie's car has not yet been auctioned off. And until that happens, she can get the car back. She'll need to start making regular payments again, plus a new$700 repossession fee.

24:04Hannah Ameer:So her plan is to find a second job to get the money she'll need to get her car back.

24:08Sarah Gonzalez:Of course. All of that will be harder because she doesn't have a car anymore.

24:13Hannah Ameer:How are you getting around now?

24:15Sarah Gonzalez:Ah, honey, sometimes I don't even know. Yeah, how are you getting home? Oh, my boyfriend's mom. She's going to take me to work. After this, I'm going to work.

24:25Hannah Ameer:Oh, okay.

24:26Sarah Gonzalez:Well, good luck on the car. Update us if you get the car back.

24:29Hannah Ameer:Okay.

24:32Sarah Gonzalez:Okay, so that is where we left things in 2019. And since then, there have been a lot of things that are worth updating. So let's start with just the repo business in general. It's been very busy. Now, there was a brief lull in collections during the pandemic, but otherwise repossessions have been rising steadily. And when we went to talk to Larry Baker, the repo man that we followed, he told us that he had started to see people cook up all sorts of new ways to stop him from towing away their cars over the last couple of years.

25:05Carmen Boulanger:They knew that they had paid their payments, so they'd block them in, put them in the backyard, park them by the front door. It just started the last two or three years. I mean, it's just been crazy.

25:15Sarah Gonzalez:Larry told us that his brother-in-law was shot in the leg trying to repossess a car.

25:21Carmen Boulanger:Before, they just didn't care. Come get it. I don't care. Can't pay for it. Now it's, I want to keep it no matter what.

25:28Sarah Gonzalez:So desperation is the biggest change that Larry says he has seen. Now there are whole companies that track numbers of repossessions in the economy, and they are still working on the final tally for 2025, but they estimate it will end up as more than 3 million cars repoed last year. And that would be more than 2019. And it would also be on par with how bad it got during the great recession. Now, meanwhile, Larry Baker himself, his biggest update is that he is now out of the repo business.

25:58Carmen Boulanger:It was a good run. We've been doing it since 06. We made a good lick of money and time to say goodnight.

26:05Sarah Gonzalez:Larry retired in April. Now, on to an update of the second side of our car loan, the dealer. Rick Reichert left his business as well. His old dealership is now in the hands of a different Reichert. The process hasn't changed. I think the tools in which we use to get there has changed a little bit. His cousin Jared told us that the Columbo method of selling a car, that left with cousin Rick.

26:34Carmen Boulanger:Yeah, the Columbo method is Rick Reichardt. Rick's a way better salesperson than I am.

26:38Sarah Gonzalez:Jared told us that repos on his lot are close to double what they were in 2019. And he says a big reason for that is that cars now are simply more expensive.

26:48Carmen Boulanger:Because, you know, in 2019, you could find a$10 ,000 to$15 ,000 car for a subprime loan. Now, I mean, you're looking$20 ,000,$25 ,000 a vehicle. So that's why we're reaching the banks saying, hey, can we stretch this loan? You usually do it 60 months. Can we do it 84 months?

27:03Sarah Gonzalez:Now, the downside to a longer car loan is that the car owners will end up paying more in interest and then overall, which means a higher chance borrowers might not be able to pay for it, which means more risk for everybody. And remember, this whole trend is mostly about subprime borrowers, people with bad or even just okay credit scores. And last fall, 6.6 % of subprime borrowers had fallen at least two months behind on their auto payments. That may sound small, but that is the highest it's been since like even before the financial crisis. Now, all of this is part of what feels like an affordability crisis for so many Americans.

27:41Sarah Gonzalez:as we've reported on a few times already, which I suppose brings us to our final update, our car buyer, Stephanie Waldrop. Now, shortly after we aired the original episode, people started reaching out asking how they could help Stephanie. The donations poured in. She was able to go back and buy her specific car back.

28:03Hannah Ameer:I drove it all the way back home. It took about 20 minutes drive. Oh, it felt so great. it felt so great when i got behind the wheel of my car we were not able to track stephanie down

28:14Sarah Gonzalez:again in 2026 so stephanie may may you still be driving the car you love with a check engine light that never comes on a full tank of gas give us an email if you hear this we would love to know how you're doing if you like stories like the one you just heard and if you also like reading stories. Well, Planet Money has a book coming out in April. And look, you can find a link to order the Planet Money book, including from your local bookstore at planetmoneybook.com. It's a great gift. This episode was originally produced by Darian Woods and edited by Bryant Erstad. Our update was reported by Vito Emanuel, produced by Sam Yellow Horse Kessler, engineered by Sina Lafredo.

28:56Sarah Gonzalez:And it was edited by our executive producer, Alex Goldmark. And you know what? We may as well give you an update on my co-reporter for this episode, Preeti Varathon. She now is a big wig making podcasts for ESPN at 30 for 30 and was a finalist for a Pulitzer Prize as well. We are very proud of you, Preeti. I'm Kenny Malone. This is NPR. Thanks for listening.