Are you looking to buy a used car and want to save money? You may want to consider purchasing a repossessed vehicle. Lenders often auction off cars that have been repossessed due to nonpayment at prices much lower than their market value.
This quick guide will walk you through the process of finding the best deal on a repossessed car. Whether you’re a first-time buyer or an experienced car enthusiast, these in-depth tips will help you navigate repo sales and secure an excellent deal.
The Advantages of Buying Repossessed Vehicles
The primary benefit of buying a repossessed vehicle is that banks are motivated to sell these cars at a discount. Banks are in the business of lending money and do not want to keep a repossessed car longer than necessary. This urgency to sell usually means significant savings for the buyer. Banks often lose money when selling repossessed vehicles, which is why they are eager to offload them quickly.
Understanding Different Types of Repo Sales
Not all “repo cars for sale” are the same. There are two main types of repo sales:
1. Third-Party Repo Sales
The first and most common type is third-party repo sales. These typically take place at large auction houses where vehicles are sold in bulk. Most of these auctions are open only to car dealers, cutting the public out from participating in the savings. Once dealers purchase these vehicles, they resell them with added commissions and fees, which effectively reduces any potential savings for the buyer.
While some auctions do sell bank and credit union repossessions to the public, they also add in fees and commissions. Although these public auctions can still offer some savings, the costs of running the auction are passed on to the buyers in one way or another.
2. Direct-to-Consumer Repo Sales
The second type of repo sale is a direct-to-consumer sale, where you will find the most savings. These repossessed vehicles are sold directly by the bank. Many of these vehicles may be parked right in the bank’s parking lot. Although less common, this is where buyers can achieve the most significant savings.
Smart banks and credit unions use their repossessed vehicles to entice car buyers to visit their premises. Once inside, buyers are more likely to utilize the bank’s financing options. This scenario creates a win-win situation for both the bank and the buyer: the buyer gets a great vehicle (and loan if needed), and the bank gets rid of the repossession while potentially gaining a new customer.
When purchasing a bank repo directly, you’ll most likely need to submit an offer. Banks sometimes have a buy-it-now price, but most repossessions are sold to whoever offers the most.
How to Find Direct-to-Consumer Repossessions
These direct-to-consumer repossessions can be challenging to find, as banks usually publish them in obscure places on their websites. Fortunately, RepoFinder.com has aggregated a nationwide list of every bank, credit union, and public auction selling repossessed vehicles (and homes) to the public. To search for vehicles near you, RepoFinder.com offers a map that allows you to search banks in your state. Vehicles sold through RepoFinder are negotiated directly with the bank, with no fees, commissions, or middlemen involved. RepoFinder simply shows you where to find the repos.
Final Tips for Buying a Repossessed Vehicle
As always, when buying a vehicle, make sure to inspect everything thoroughly before making an offer. Repossessions are generally sold as-is, so it’s crucial to ensure the car meets your standards.
By understanding the different types of repo sales and using resources like RepoFinder.com, you can find a high-quality repossessed vehicle at a great price.