To begin with you need to be aware of exactly what you’re buying. If you don’t have a chance to take the car for a test drive and get it inspected before you buy then you could be taking a huge risk because there is often no comeback for the buyer.  This risk is increased even further if you’re thinking of purchasing a repossessed boat, the likelihood water testing the vessel will be little or none. If the auction listing says it’s being sold “as is” and doesn’t come with any sort of guarantee then you need to be especially careful when buying. Remember, in most cases the seller will have covered themselves legally and hence you won’t be able to get the money back once you’ve bought the car.

You also need to remember that on top of your bid you’ll have to pay extra to the auction house. Make sure you know exactly how much you’ll have to pay because sometimes it’s a fixed fee while other times it’s a percentage. Always factor this extra cost into your budget before you start bidding and make sure you don’t forget it in the heat of an auction! Many beginners to repo auto auctions do forget that there’s an extra fee and find they don’t have enough money once they’ve won an auction.

You should also factor in the extra cost to your decision as to whether you’re getting good value for money. There’s no point getting a car for $500 under the market value if the extra cost is going to be $600. It can be hard to work out figures while an auction is going on so you need to write them down before the bidding starts.

Sometimes a repo car auction will have a viewing session several days before the event but in some cases you’ll only be able to view the cars on the day. Either way, the earlier you get to the viewing the more chance you’ll have to look at the different cars available and make a judgement of their condition. Viewings can get busy quickly so the less people you have to compete with the better.

When a car is repossessed, the person in this situation credit will be drastically affected in a negative way. A car repo causes your credit score to drop significantly and it also makes being approved for credit in the future extremely difficult.  Of course without the means of personal transportation, getting to work for most people becomes a challenge.

Profiting From Repossessed Vehicles

Repo cars for sale can  provide the atmosphere for a great deal of money to be saved, for example, imagine being able to buy a 2008 Chevy Tahoe for $9,000 at auction.  At the time of this writing that would be an absolute steal considering that same vehicle if purchased at a car dealership would cost over $20,000 according to Autotrader.com

The main down side with repo car sales is that there are no Carfax reports to view before you buy, or warranty of any kind. It is safe to say that the core reason to buy repo cars is for the opportunity of buying at incredible low prices.

Finding Your Vehicle

Most people who find out about the repo car auctions discover them through distributed information from networks they belong to. These networks are normally found online, and most networks charge a fee for membership. The typical fee can range from a one time payment of $100 to $250  while others offer monthly membership fees ranging from $29/month to $89/month.

Having said that and with the power of the internet and some diligence you can locate repo car auctions in most areas through sites like autotrader.com, autolink.com and others.  There are also specialized dealers that received large volumes of repo’d vehicles, the most well known one being the repo depot.

Larger metropolitan areas will provide you with a larger selection of repo auctions, for example I live in Toronto, Canada and have the choice of severeal auctions I can attend each year.  They are normally held at the same location and same time of year.

If you’re going to attend a car auction you need to be prepared, the best advice I can give is to take a certified mechanic who can at least give the car you’re interested in some basic inspection before you bid.  Auto auctions are the same as any type of auction, make sure you keep your emotions in check, set a maximum bid for yourself and stick to it, auctioneers are masters at creating a buzz and it’s easy to get caught up in it.

Repo car sales continue to rise due to people losing their automobiles because of non payment of their loans. So car repossessions will forever equal opportunity.  The prices of the cars may be great but remember there is no financing available, so normally the winning bidder must pay a deposit immediately after winning.

Once the deposit is made, the winning bidder may have 24 to 48 hours to pay the remaining balance by either cash, cashier’s check, money order or a credit card.  One thing is very clear when it comes to a car repos, purchasing a vehicle this way has its pros and cons, but for the people who can afford to pay a lump sum payment, the pros out weigh the cons by a landslide.  A new wave of online auto auctions has come to the forefront, similar to eBay, you can bid on the vehicle from any location, personally I find this a bit risky, I wouldn’t purchase a car without an inspection ahead of time.

Conclusion:

As bank repos of all kinds continue to rise it appears that value pricing on homes, cars and property of all kinds continue to be a way to profit from the recession if you are in the enviable position of having cash in hand.

‘Slang for Repossessed Cars’

Most people interested in repo cars are interested in the price and quality of vehicle you can purchase. Repossessed cars come to us from one main source namely; people who forfeit on their payments.  In today’s economy there is an increase in amount of repossessed cars for sale, most are sold at auction to individuals or used car dealers who will flip them on their lots.  Car repo is becoming more commonplace as the state of the economy worsens and more and more people are simply walking away from their leases and financial obligations.

How Repossessed Cars Come To Be

After missing numerous payments or sometimes as little as 1 or 2 payments and failing to bring your account current with your car the lending company has taken steps to have your car repossessed.  If 60% or more of the loan has been paid the creditor must by law sell, lease or dispose of your car, this is usually done via repo car auctions.  This is true unless you have signed a statement after the default that allows them to keep your auto in full payment of the loan.  The sale of your car must be held within ninety days after it has been repossessed. You must be notified of the date, time and place of the auction or sale.

After The sale

Once the repossessed car is auctioned or sold, the funds derived from the sale are required to go to the outstanding balance owed on the loan including the the costs of the sale/auction and applicable lawyers fees and repossession costs i.e. Towing, storage, emergency repairs etc.  Any overage resulting from the sale or auction of the repo car for sale must be paid to the buyer. Normally the funds raised at auction or from the sale are insufficient to cover the outstanding amount owed, in this case the re-possessor may choose to sue the consumer/owner for the full amount owed including legal fees, repossession fees, auction costs etc.

Retrieving repocars is possible and you have the right to redeem it until the time it is sold or within 21 days of receiving legal notice that the lender/creditor is choosing to keep it. Costs will be dependant on the terms of your contract and it is likely you will still have to pay legal costs, towing, storage and more. The majority of seized vehicles go to auction.

Where Can I Find A Repossessed Car to Buy?

You can find repo’s on many different  auction websites like eBay and other similar sites. You can also search your neighborhood for auction houses, banks, and lending companies who have auto loans. Another sure bet that will feature bank secured cars is the classified ads in newspapers and even used car dealers or other auto dealers in your area, the majority of used car dealers dabble in them.

How To Buy A Repossessed Vehicle

The majority of repossessed cars go to auctions, it’s best if you have a plan of attack before attending and car auction to purchase a car.

1. Don’t go alone, take a friend or family member, better yet your local mechanic, if you don’t have one you can even pay a mechanic to come along to give the car an inspection.

2. When you arrive you’ll need to register, they’ll give you a bidders badge, copy of the inventory for auction, rules and regulations etc. You’ll also likely need to provide them with a credit card.

3. Highlight any vehicles you’re interested in on the inventory list.

4. Use the Edmunds Used Car pricing guide to determine the high and low range wholesale value of the vehicle. It’s condition will determine it place in within the range.

5. Use an inspection sheet to grade the vehicles you’re interested in, this is where your mechanic will be invaluable.

6. Make sure you start the vehicle and listen for strange noises, odours and leaks.

7. Finish your inspections with plenty of time before the auction starts.

8. Know the maximum you’re prepared to pay for the car and stick to that number, it’s easy to carried away at an auction and that’s what they count on.

9. If you’re the winning bidder you’ll be required to make final payment arrangements before leaving, make sure you know the rules beforehand.

10. To make payment you’ll be required to go to the main auction office where you’ll make final payment. Here you’ll get a U.S Government title transfer certificate, a damage disclosure statement, the auctioneer’s receipt with odometer reading and your keys.

This gives you a good outline on how to buy repossessed cars, finding the repo auctions and more, please continue to browse our website for more repo car tips and tricks and more!  You’ll also find that cars aren’t the only vehicles available at a repo car auction, you’ll also see lot of repo boats, rv’s, motorcycles, atv’s, jet ski’s and pretty much anything that moves.  As with any used vehicle you’re always advised to inspect the item as thoroughly as possible and whenever possible take a qualified mechanic to give it a once over.