Friday 19 August 2022

Banks Repossess More Vehicles As Consumers Stop Paying

Changes in the economy and high consumer indebtedness are seen as the cause

Paying the bills

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19 August 2022 - At The Banks - BCCR

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The sale of vehicles has slowed down and, as expected, also the credits for their purchase. At the same time, those who already have financing show delays in monthly payments or have stopped paying altogether.

The foregoing has led financial institutions (banks mainly) to resort to repossession of a greater number of vehicles belonging to delinquent customers.

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The Banco de Costa Rica (BCR), Banco Nacional (BN), BAC Credomatic, Scotiabank and Cafsa, major lenders on vehicles, report an increase repossessions, from 19% and up to 50%, more than double compared to what has been usual.

Although the non-payment is in vehicles of all types, the majority is in 2016, 2017 and 2018 models.

Nancy Camacho, vice president of Global Operations at Scotiabank, told El Financiero, the increase is due, “first, to changes in the economy, and second, to high consumer indebtedness.”

The executive explained that the economic situation of the country – slowdown in production and higher unemployment – has led many debtors to make late payments.

But the late payments is not only car loans, but also housing, credit cards and small consumer loans, among others.

While some banks use used car dealers to move their cars, they can also be found online at websites like CRAutos.com and Encuentra24.com.

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Q Costa Rica
Reports by QCR staff

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