PR - Truck Repossessions Increased Significantly in 2007

Repossessions and liquidations of tractor-trailer trucks increased 110 percent in 2007 compared with 2006, according to Nassau Asset Management’s NasTrac Quarterly Index (NQI). In addition, repossessions and liquidations of construction, printing and machine tool equipment declined in a year-to-year comparison, while medical equipment repossessions rose. Nassau Asset Management tracks equipment trends as part of its business providing collections, repossessions and remarketing services to the nation’s leasing and finance industry.

“We are seeing a very significant correction in the market,” said Nassau President Edward Castagna.  “Even in a category such as construction equipment, where the 12-month total showed a decline, repossessions were up significantly in the second half of 2007.”  However, Castagna also pointed out, “Nassau is still selling equipment because there are still some very vibrant businesses that need equipment, have good credit, and still look good on paper.  These businesses made conservative financial decisions, maintained focus on their core business values, and now flush with equity. They are taking advantage of their position in the current economy.”

Nassau Asset Management of Westbury, NY, has been providing full-service asset management, including asset recovery, collections, remarketing, plant liquidations, and appraisals for more than 25 years to the equipment finance industry.

Nassau is also seeing a growing international presence in the U.S. market, via the Internet. Castagna estimated that Nassau’s web site receives 700,000 hits each month, many of them coming from international companies. “These companies are coming forward to review the equipment online,” Castagna said. “They then bid on it and come to the U.S. to inspect it and then purchase.”

Nassau cited several reasons for the 110 percent increase in truck repossessions and liquidations. Leading the way is the decline in home building, which affects a number of peripheral business sectors, most of which utilize trucks. “From the forest to the saw mill to the construction site, along with the movement of people in and out of those homes and the delivery of appliances and furniture to the home, there are trucks involved in every step of the process,” Castagna said. “The rings continue to expand out of the housing epicenter.”

In addition, government regulations (including restrictions on travel time), rising fuel costs and competition placed greater financial strain on businesses that utilize trucks. Low interest rates in the past few years and significant sales of the remaining trucks with ’06 engines as compared to the less proven ’07 versions with tougher emission standards, led to an increase in late model trucks on the market, driving down prices in the used truck market.

Nassau’s latest NQI compares the company’s internal repossession and orderly liquidation activity in 2007 with 2006. In addition to reporting on tractor-trailer trucks, the latest NQI revealed the following trends:

• Construction Repos Declined – Repossessions and liquidations of construction equipment dropped by 32 percent, as compared to 2006. 
• Machine Tool Repos Declined – Repossessions and liquidations of machine tools declined by 47 percent in 2007 over 2006. 
• Medical Repos Increased – Repossessions and liquidations rose in 2007 for medical devices by 121 percent.
• Printing Repos Decreased – Repossessions and liquidations of printing equipment dropped by 23 percent in 2007 compared to 2006.