This year’s Manheim Used Car Market Report projects that repossessions will total 1.7 to 1.8 million units in 2017, representing an increase “in the neighborhood of 100,000 units,” according to Cox Automotive chief economist Tom Webb.

Webb elaborated about the expected figures and what factors could impact whether repo agents, forwarding companies and auctions will have more chores to do this year.

“If you assume the portfolios continue to perform extremely well, then essentially the number of contracts outstanding will dry up by 75,000 to 100,000 units per year,” Webb said during a recent phone conversation. “If you were to assume that credit conditions change, or more importantly the labor market conditions change, and people start defaulting on their loans then certainly the repo levels could quickly accelerate.

“The assumptions going forward assumes that everything continues to perform extremely well,” he continued. “It was probably the most conservative number of repos going forward.”

The report showed repossessions have been on a steady climb since 2012 with the expectation of it continuing through next year. The annual repo tally has remained at 1.3 million units and higher throughout that span, which arrived after a drop-off following the all-time high point in 2009 when the total hit 1.9 units.

With repossessions on track to approach that threshold again, Auto Remarketing asked Webb to reflect back on when annual repossessions passed the 1-million mark for the first time. Manheim’s data pegged that happening in 1999.

“In terms of the earlier cycle, we always go through these cycles where basically many subprime lenders become overly aggressive,” Webb said. “Certainly you saw that with their own financial results in the late 1990s, 2000 period where there was some turmoil in the industry.

“Obviously the real peak in repos was driven by the macroeconomic conditions in 2009. But the industry does go through cycles. And fortunately it learns from every cycle. It sort of repeats itself, but you get a little bit smarter every time. But I think a lot of what we’ve seen in subprime and deep subprime, you’ve some people pull back and that’s a rational response,” he continued.

“I would call it an instance of the market self-correcting and adjust to what conditions are rather than continue to go down a bad path,” Webb went on to say.

When finance companies have to repossess a vehicle, it often tries to complete the recovery process as quickly as possible.

“Various laws and regulations dealing with the processes of collateral collection and liquidation often present a stumbling block to that quick conversion, but lenders and their auction partners have been successful in streamlining the processes that they do control,” the Manheim report said.

Despite those efforts, finance companies still are seeing their recoveries deteriorate. General Motors Financial president and chief executive officer Dan Berce briefly touched on the subject when the company shared its fourth-quarter and full-year performance report earlier this month.

"Our loss rate was also impacted by a lessening recovery rate trend. We recovered 50 percent on our repossessions in the December 2016 quarter. That was down from 53 percent a year ago and we do expect recovery trends to continue to go down into 2017,” Berce said according to a transcript of the company’s conference call posted by GM Financial.