(NewsNation) — The cost of buying a used car has dipped 7% this third quarter — the worst decline since the beginning of the pandemic, data compiled by vehicle-auction company, Manheim, reveals.

While low prices may sound appealing to people hoping to buy a used car, investors are ringing the alarm in fear that the country’s struggling economy will ultimately lead to more repossessions.

“There has been a real tightening in margins on new-auto production, on one hand, and on the other there’s been a decline in used-car prices,” Fifth Third Chief Executive Officer Tim Spence told Bloomberg in an interview Friday. “That has caused us to throttle a bit back on production of loans.”

It’s an issue lenders are looking to get ahead of as such was the case when used car prices spiked at the beginning of the pandemic.

Now, instead of a lofty overhead, rising interest rates are the culprit to high monthly payments, which are simultaneously skyrocketing.

“The average payment on on a car loan is now a $738 a month,” Chris Gardner, the CEO Vamos Auto in Dallas Fort Worth, told NewsNation.

Vamos Auto is an integrated finance company specializing in the subprime car market, making them not only a dealer but also a lender.

“When the fed raises rates at 75 basis points, what seems like monthly, it’s going to increase those auto loan rates at a faster rate than the decline in car prices,” Gardner said.

Gardner says the problem is if consumers end up owing more than their cars are worth, some might stop making payments altogether.

“As these loans default and these lenders take [the cars] back in they’re receiving less when they go to sell that car,” Gardner said.

According to Bloomberg, Wells Fargo & Co. reported higher loss rates for loans it originated late last year, which contributed to an uptick in write-offs for the period. Similarly, Bloomberg reports that Ally Financial Inc., the country’s second-largest auto lender, saw four times as many charge-offs for retail auto loans in the third quarter and that Fifth Third Bancorp is pulling back on originations.

However, Ally’s chief executive officer, Jeffrey Brown, maintains there will not be changes to his company’s originations, citing the net charge-off rate, which has remained below pre-pandemic levels.

“We still feel really good about new loans that we’re originating today,” Brown told Bloomberg. “We constantly trim the margins where we see incremental pockets of risk. The analytics behind this are very robust—we have weekly credit conversations and buy-box adjustments—so it’s a very fluid environment.”

This comes despite Fifth Third reporting more consumers with unfavorable credit scores have been negotiating lenders down to the bone to keep their vehicles.

“People, if they have a job, they want to keep their car—they don’t want to go buy a new one,” Chief Credit Officer Richard Stein said, speaking on used car buyers at the beginning of the pandemic to Bloomberg.

“They’re doing a lot of things to keep their car and to stay current or work through with the lenders.”