APRIL 27, 2023
There are not enough people to repossess all the motorcycles.
That was the message from Harley-Davidson Inc., which said Thursday its credit losses in the first quarter were due in part to a shortage of repossession agents.
The repossession industry is seeing an uptick in demand as more Americans struggle to afford their car payments. And companies that specialize in seizing vehicles are having trouble hiring enough agents, after many decamped for other jobs during the pandemic when business largely dried up due to stimulus measures.
For Milwaukee-based Harley, the repo shortage combined with a decline in retail bike values. That contributed to realized credit losses of about $52.6 million in the first quarter for the company’s financial arm, vice president and treasurer David Viney said on a conference call Thursday.
“A lot of people left the repossession industry during Covid,” Viney said.
He added that Harley has accelerated efforts to reach customers in cases of late-stage delinquencies, and that the company is “making a lot of enhancements” to its repossession strategy.
Those changes, combined with an expected seasonal recovery in credit losses, should help reduce the loss rate in the coming quarters, he said.
At the North American Repossessors Summit in Orlando earlier this month, many attendees reported staffing shortages and said they’re gearing up for boom times. In March, the percentage of subprime auto borrowers who were at least 60 days late on their bills was 5.3%, up from a seven-year low of 2.58% in May 2021 and higher than in 2009, the peak of the financial crisis, according to data from Fitch Ratings.