Just getting to work is going to be a bigger challenge for many

Don’t be surprised if an employee requests a temporary work-at-home arrangement because of a “vehicle situation.”

That “situation” may actually mean the person’s car just got repossessed by the bank.

Upwards of 15,000 cars and trucks months behind on payments are liable to be repossessed this month. Most of the vehicles headed back to the lenders were bought in 2020 and 2021, many of them with monthly payments of $1,000 or higher per month (gulp!).

Subprime repossessions are up 11% compared to 2020 data. Prime borrowers with the best credit scores are also feeling the pinch. Auto repos for prime borrowers doubled in 2022.

According to Barron’s, “Americans had temporary pockets of income’ during the pandemic, thanks to stimulus checks, extra unemployment aid and Child Tax Credit payments … But those government supports have ended, and many families are now facing budget shortfalls.”

Transportation woes aren’t going away anytime soon

Inflation is a big driver of the repossession increase, to be sure.

New car prices and trucks are higher than ever. Used car prices keep climbing as well. The average used car price hit $32,000 earlier this summer.

The Fed’s recent interest rate hikes should dampen consumer demand and help bring down prices. But rathe hikes won’t solve poor credit scores or money woes for folks who risk seeing their vehicle repossessed (or worse) are facing a home foreclosure.

Some financially struggling employees won’t let co-workers or their bosses know what’s going on until it’s too late to offer a lifeline.

Some ways that companies and co-workers can alleviate high costs are:

• arrange car pools. Folks who live near each other and work similar schedules can share rides. Employees who don’t own or lease a reliable ride may be willing to front the money for fuel.
• extend or expand work-at-home schedules where feasible, and
• remind employees about employee assistance programs and other options your HR department can offer.

CFOs may want to let supervisors know to keep their ears and doors open for employees who are struggling to pay bills. Transportation costs are going to be a big issue for millions of Americans through 2022 and next year.