BANDON, Ore. — After eight years of steady increases, CNW Research recently reported that combined new and used repossessions eased a bit during the first half of December.

While slight, 5.36 percent to 5.26 percent, Art Spinella, of CNW, said this is a good sign.

"That may not seem a significant decline, but after eight years of steady increases, anything with a minus-sign in front of it is good news," he explained.

"The long-term run up in repossessions can be traced to steadily easing credit at both captive and non-captive financial institutions," he continued. "As approvable credit scores declined, the finance industry recognized some increase in repossessions and delinquencies would follow but could likely be offset by higher interest rates for lower-scoring customers. To a point, that worked – until the wheels came off the economy."

According to Spinella, "even the most studious actuarial couldn't have predicted the run up in repos among those who historically had been marginal credit risks but leaned toward ‘good' side.'"

Basically, with the housing-value collapse and drop in equity that resulted (on which he says many new and used cars were purchased) drove the climb. It didn't help that many banks canceled home equity loans which led to near-prime customers falling behind on car payments.

"In response, banks and other financial institutions have been hesitant to loan to loan to anyone but the best possible credit risks and that trend will continue at least through the first half of 2010. Net result: Potential repos should fall dramatically," he concluded.

Editor's Note: If you found this article helpful, stay tuned for our new Repo & Recovery e-newsletter that will begin launching Monday afternoons. The first edition will come out next week.