Implications: There are lots of things going on in this story, in the form of lessons learned and adjustments made during the Great Recession. First, the labor market placed a premium on transportation: If you had a job, you needed reliable transportation to fulfill it. If you were looking for a job, you desperately needed transportation to find it. Even at risk of foreclosure, the car payment had to come first, because it is so directly connected to employment and thus, future prospects.
But coverage about the mortgage meltdown shed light on the whole foreclosure process, and trained many people that the “grace period” on a home loan might be more forgiving than a car loan. The repossession process on a vehicle moves much more quickly than the foreclosure process on a home.
More than anything, this story does a great job of illustrating “Reconciliation,” the idea that after 19 months of recession—and the 32 months of recovery that have happened since—consumers have adjusted their financial behaviors to reflect their new collection of economic realities. That’s a very personal process… and might look quite different from one home to another.