A used car dealer is sounding the alarm about the state of the car industry, warning that dealers are going out of business at an alarming rate. His concerns stem from what he's witnessing firsthand: repossessions at record highs and dealers taking desperate measures—including one neighbor who allegedly fled the country. Used Car Dealer Warns of Industry Crisis TikTok creator Rob (@cardealerrob), who says he’s been a car dealer since 1999, explains why he believes the used car market is heading for a major correction. According to the text overlay in the video, his car dealer neighbor "just stole over 30 cars from his floorplan company." Rob says repossessions are at an all-time high, which creates a cascading effect on the broader economy. When people lose their cars to repossession, their credit scores plummet. It can go from the 650 to 700 range down to the low 500s, he explains in the video. This credit damage prevents them from making other major purchases like appliances, homes, or replacement vehicles. "When they lose their credit, they can't buy dishwashers, washers, and dryers. They can't buy houses, and they can't buy cars," he says in the TikTok. Those who do manage to get financed after a repossession face predatory lending practices, with interest rates as high as 29%, Rob warns. He suggests that when a significant portion of the country defaults on their vehicles, it's a troubling sign for the entire economy. Neighbor Flees the Country Rob recounts a shocking story involving a dealer located just two doors down from his own operation. The dealer had approximately 30 to 40 cars financed through a floor plan with a major lending company, he says. OWNERSHIP STORIES Viral stories from across the web Our team of experts tracks what owners are saying about car-shopping, repairs, the daily driving experience and more on social media. "Overnight, literally overnight, they loaded up all their cars and they shipped them out of the country while he still had control of them," Rob says in the video. Floor plan financing is a common practice in the car business where lenders provide credit to dealers to purchase inventory. The lender retains ownership of the vehicles until they're sold, and periodically inspects the lot to ensure the inventory is present. According to Rob, when the floor plan company arrived for their inspection a few days later, the cars were gone. He says the dealer loaded the vehicles onto car carriers, placed them in shipping containers, and shipped them to Venezuela, where he also went. "Even if he gets caught, he's in Venezuela. He went back to his home country," Rob says in the TikTok. "... They don't care they're stolen cars at this point." Multiple Dealers Closing as Market Conditions Worsen The alleged theft isn't an isolated incident, according to Rob. He says his next-door neighbor also recently went out of business, not due to fraud, but because business declined after a strong period during the pandemic. "Spring of this year, he started to decline, and he couldn't keep it going, and he's going out of business," he says in the video. Rob notes that several other dealers in his area are also shutting down, prompting him to tighten his own financial belt. However, he suggests that dealers with strong credit and cash reserves may find opportunities in the struggling market, as they'll be among the few able to secure financing and purchase inventory at auctions. "If you're the only guy in town that can borrow money, there are gonna be opportunities if you wanna get in the car business and you've got those things going for you," he says. Repossessions Reach Crisis Levels as Economic Pressures Mount Rob isn't exaggerating when he says repossessions are at an all-time high. The numbers back him up. Roughly 1.73 million vehicles were seized by lenders in 2024, the highest level since 2009 during the financial crisis, PYMNTS reports. And 2025 is shaping up to be even worse as more than 2.2 million vehicles have already been repossessed this year, with that number expected to hit 3 million by December, a CBS affiliate reports. The reasons are fairly straightforward: cars are expensive, and people are financially strained. Americans collectively owe over $1.66 trillion in auto debt, according to the Consumer Federation of America. The average monthly payment for a new car has risen to $748, and the average price tag has surpassed $50,000 for the first time. Subprime borrowers (people with lower credit scores who typically face higher interest rates) are getting hammered the hardest. Newsweek reports that in January, subprime auto loan delinquencies exceeded 6%, the highest level in over 30 years. Although the problems buyers and dealerships are facing are nationwide, few people had much sympathy in comments on Rob’s post. "People always buy a car they can’t afford 4WD!" a person said. "My grandpa told me many years ago to stay in my lane. I’ve followed that advice through life and only had two small car loans my entire life. I’m an old man now," another wrote. "If all these people are defaulting on their auto loans, including dealers, then the market should begin to be flooded with cheap cars. Opportunities to buy," a third speculated. Motor1 reached out to Rob for comment via TikTok direct message and comment. We’ll update this if he responds. We want your opinion! What would you like to see on Motor1.com? Take our 3 minute survey. - The Motor1.com Team