Vehicle repossessions on the rise in the Phoenix area

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MESA, AZ (3TV/CBS 5) -

Fewer people are making their car payments on time, and it has some worried that what we saw in the housing crisis - people buying more than they can afford - is happening in the auto loan industry.

"The amount of vehicles we've recovered is substantial considering what it's been six months ago," said Gina Aguirre with Reliable Recovery Services. She said they're repossessing 325 to 450 cars a month.

"It is out of their price range," Aguirre said. "What they're not understanding is they're not paying down the principal, it's basically all interest."

The average loan for a new car right now is $29,880 according to Experian Automotive, and the average new car payment is $499 a month, both increases from last year.

"Everybody is a person, everybody has a story, everybody does go through hard times," Aguirre said.

"It doesn't matter if the salesperson says, 'Oh, we'll just stretch that payment out and make it affordable for 84 months.'" said Michael Sullivan with Take Charge America. "No."

He said people are wearing out their cars before they can pay them off. 

"You don't want the length of the car loan to be longer than the life of the car, which often is four to five years," Sullivan said. He added that people should not spend more than 10 percent of their take-home pay on a car payment, and they should try and put at least 10 percent down. 

"I have kids that are young and establishing new credit," Aguirre said. "I tell everybody, make sure you read your contract, make sure you know what you're getting into."

Copyright 2016 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.

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Lindsey ReiserLindsey Reiser is a Scottsdale native and an award-winning multimedia journalist.

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Lindsey Reiser

Lindsey returned to the Valley in 2010 after covering border and immigration issues in El Paso, TX. While in El Paso she investigated public corruption, uncovered poor business practices, and routinely reported on the violence across the border.

Lindsey feels honored to have several awards under her belt, including a Society of Professional Journalists Mark of Excellence Award, Hearst Journalist Award, and several National Broadcast Education Association Awards.

Lindsey is a graduate of the Walter Cronkite School of Journalism and Mass Communication at Arizona State University, and she currently serves as a mentor to journalism students. She studied for a semester in Alicante, Spain and also earned a degree in Spanish at ASU.

She is proud to serve as a member of United Blood Services’ Community Leadership Council, a volunteer advisory board for the UBS of Arizona.

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