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As automakers struggle with their finances, many car owners are struggling to make the monthly payments on their car financing plans - and many are failing. Car repossessions are up 10 percent over last year. But lenders are now adjusting more loans so the repo man doesn't have to take so many cars back. NPR's Tamara Keith reports.

TAMARA KEITH: Analysts predict about 1.6 million vehicles around the country will be repossessed this year. And several hundred of them are parked in the gravel lot behind razor wire at the Maryland headquarters of the Laurel Adjustment Bureau. Owner Bill Johns says a lot of them are SUVs.

Mr. BILL JOHNS (Owner, Laurel Adjustment Bureau): If you look across this lot, there's a big van, there's big a pickup truck, jeeps, Magnum Chryslers, that kind of thing - Hemi Motors.

KEITH: When Johns first got into the repo business in the late 1960s, the emphasis was on adjustments, working on behalf of banks with borrowers, adjusting their loans so they could get current on their payments. That's why his business was named the Laurel Adjustment Bureau. But he says that fell out of fashion, and hooking cars to tow trucks became the bulk of his business. Now, Johns says, adjustments are back.

Mr. JOHNS: Sometimes, they'll not make you make any payments on the principal and just let you pay interest only. These are things that used to happen years and years ago, but now it's back.

KEITH: Johns says his clients are telling him to knock on people's doors and talk to them, find out what's wrong and whether the situation might improve.

Mr. JOHNS: Mostly, we represent banks, finance companies and credit unions. And all of them do not want to repossess anything, all of them are trying not to have to repossess something.

KEITH: To understand why, just go to a repo auction.

(Soundbite of a repo auction)

Unidentified Man: This next unit, the SUV, 55,000 actual miles.

KEITH: A shiny black 2005 Ford Expedition rolls into the chilly warehouse where Bill Johns holds his weekly Tuesday night auto auction. The room is painted with a checkered flag race car theme, but people aren't racing to take this baby home.

Mr. JOHNS: People, take a look at the interior of this truck. Somebody give me $10,000 for this unit.

KEITH: Ten thousand dollars is well below the blue book value of this SUV, and likely even further below the outstanding balance on the loan. And this isn't just happening at John's relatively small auction. Manheim auctions off five million cars a year. And the company's economist Tom Webb says auction prices are down, way down across the board. He says, this is what's motivating lenders to try and keep borrowers in their cars.

Mr. TOM WEBB ( Economist, Manheim): A lot of them, you know, obviously do not want a repo to occur because they're going to incur a loss, obviously.

KEITH: Back at the auto auction one man seems willing to bid when no one else is interested. Bruce Javapor(ph) runs Nationwide Imports, an auto wholesaler. And there's one car here he can't take his eyes off of.

(Soundbite of a repo auction)

Unidentified Man: This is a dying breed. You're not going to see many of these anymore.

KEITH: It's a 2003 Hummer H2, and it looks to be in good shape.

Mr. JOHNS: Ten thousand dollars.

Mr. BRUCE JAVAPOR (Nationwide Imports): Ten thousand.

Mr. JOHNS: I have $10,000.

KEITH: Javapor has the winning bid, but the lender ultimately doesn't accept it. Ten grand is just too low. The lender wants 12,000. So the Hummer will go back on the block another Tuesday night. Analysts expect the flow of repossessions will eventually slow down because new car sales are in such a slump. And there will simply be fewer loans to go bad. Tamara Keith, NPR News, Washington.

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