Will Ford's credit change make car repossessions rise?

A lot of Philadelphia drivers are looking forward in these last days of summer to the day when the Ford Motor Company releases its 2018 vehicles to dealers. The company is coy about the exact date of the release, saying only that will happen in fall.

Here's why it matters: Ford Motor's financing unit is changing its credit approval process in a bid to pump up flagging sales. The new approval process is expected to make more people eligible for loans, even though the company is reporting a rising loan loss rate. The bottom line for consumers could well be easier credit which then leads to more auto repossessions.

Fox Business reports that Ford Motor Credit will make it easier for applicants with limited credit histories to gain approvals for car loans and leases. Those applicants tend to have lower credit scores because they do not have a record of managing debt.

Fox notes that subprime lending helped automobile manufacturers to record sales years in 2015 and again last year. Ford's American sales are down 4.3 percent through the first seven months of 2017, however, so this move could put a bit of bounce into loans and leases.

But when a company writes off $82 million in U.S. loans and leases in the second quarter -- up a whopping 30 percent over 2016 -- it makes people wonder if easing credit is a smart move. Maybe the company should focus instead on making better products. Who knows? That might improve sales.

We don't know how the Ford gambit will work out, but we do know that vehicle repossessions are already a problem. Far too often, consumers find that they are threatened or harassed by a repossessor and it is all too common to hear of consumers who have their property violated or damaged in a car repossession.

If your rights have been violated in repossession, you can speak with a Philadelphia attorney experienced in consumer protection.

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