#repossessed cars for sale
How To Buy Repossessed Cars At Auction
Each week, thousands of cars get repossessed in the US. When payments stop being made, new and used cars become the legal property of the bank or lender that provided financing for vehicle purchase. Major lenders and banks end up with many cars as a result of this setup, and excess vehicles must be sold at auction to recoup costs. Banks are looking to sell vehicles quickly as storage and maintenance costs are too high for them to sell cars at market value; as a result, repossessed cars can be bought cheaply at auction, often saving buyers thousands of dollars in the process. Here’s our guide to spotting and purchasing a great bank repo cars at auction.
Why Do Cars Get Repossessed?
Cars are expensive items. The average new vehicle in North America will set you back over $30,000; most buyers don’t have this much money lying around in the bank so will seek car financing when purchasing a new, or even used, vehicle. Auto loans and auto financing deals all vary depending on the provider’s terms and conditions, but most agreements will set out a minimum monthly repayment figure. If that figure is received each month, the car remains with the owners until the final payment is made when the car becomes legally theirs. If a payment is missed, a warning letter is sent out to inform the owners that they could lose the car if payment is not received shortly. After several warnings, a company is usually sent out to tow the car away, as it then becomes legal property of the bank or lender. Once the bank has collected the car, they quickly sell it in order to get back part of their initial investment. In some cases the bank may lose money, especially if a car is repossessed cars after only a few months. In rare cases, the financial provider is also legally permitted to sue the former owner for the difference between the final auction price and original loan amount.
A growing number of repossessed cars come from car title loan providers. Car title loans give anyone with a valuable vehicle a small injection of cash if they sign their car ownership rights to the company. If the loan is not repaid (with applicable interest) after the stipulated period, the car will be repossessed by the company. These repo cars do not usually come on the open market, as the title loan companies sell them on independently.
Are Only Cars Available?
Cars make up a large part of repossessed sales, but there are plenty of other vehicles on offer too, including boats, trucks, off-road vehicles, RVs, campervans, snow mobiles, jet skis, motorcycles and even planes. The majority of vehicles are new or nearly new; potentially it is also possible to find rare classic or collectible cars at auction, if they were bought with borrowed money. Generally, the repossessed vehicles you find at auction will be of very high value, as cheap cars are usually just bought with cash without the need for an auto loan. Some vehicles will be in good working order, while others may have been damaged or neglected. The auction environment does not often allow test drives or close mechanical inspection of vehicles therefore most must be purchased ‘as-seen’. This is great for bargains, but there’s a small risk that a car or other vehicle may require some work before being fully functional. Car dealers and those with a bit of renovation experience will have the most luck with old or faulty vehicles. With a little know-how, it’s possible to make good money buying bank repossessed cars and selling them on for a profit.
Repossessed Cars: Where To Find The Best Auction Deals
Unlike police car auctions. repo cars are not government-owned and are sold at private auctions. Finding an auction means knowing where, and when, lenders will be auctioning off goods. You can contact local car auction houses in your area to see if they have any future auction dates and listing information available. It is also a good idea to get in touch with major car financiers directly and see if they have any publically-accessible information to offer you. Alternatively, sign up with an experienced auction scout company that can provide you will plenty of up-to-date repossessed car auction data. including model information, auction locations and dates.