When it comes to buying a repossessed vehicle, there are a lot of misconceptions floating around. Some people believe that repo vehicles are damaged, have bad titles, or come with all kinds of risks. The truth is, buying a repo vehicle can be one of the smartest financial decisions you make. This post, “Lies People Tell You About Repo Vehicles,” will bust some of the most common myths and give you a clear understanding of the benefits. Let’s get started!
1. Lie #1: Repo Vehicles Have Branded Titles
One of the biggest lies out there is that repossessed vehicles always have branded or damaged titles. A branded title means the vehicle was totaled, flooded, or had significant damage. But the fact is, being repossessed does not affect the title status in any way.
The Truth: A vehicle’s title only changes if it has been in a serious accident or suffered damage (like flooding). Repossession happens because the original owner stopped making payments, not because the car itself has issues. Many repo vehicles have clean titles and are just a few years old.
Takeaway: Always ask for a vehicle history report to verify the title status, but don’t assume that repossession means something is wrong with the title.
2. Lie #2: Repo Vehicles Don’t Have a Warranty
Another common lie is that once a car is repossessed, it loses its warranty. People often assume repo vehicles are older or in poor condition, so they must be out of warranty. This couldn’t be further from the truth.
The Truth: Repo vehicles are often still under the factory warranty. For example, if the original owner only drove the car for a year before it was repossessed, the factory warranty may still be valid. It’s important to check how much time or mileage is left on the warranty, but repossession does not automatically cancel any existing coverage.
Takeaway: Always ask about any remaining factory warranty when you look at a repo vehicle. It’s one of the many ways you can save money when buying repos.
3. Lie #3: Repo Vehicles Can’t Be Financed
Some people will tell you that repo vehicles can’t be financed because banks won’t offer loans on repossessed cars. This is simply not true.
The Truth: In many cases, the same bank selling the repo vehicle will offer financing options. In fact, they may even provide better interest rates to help move the vehicle faster. Banks and credit unions want to get their money back, so financing repo vehicles is actually a win-win situation for both parties.
Takeaway: You can often finance a repo vehicle through the same bank or credit union selling it, making it easier to buy a vehicle you love at a price you can afford.
4. Lie #4: Buying a Repo from a Dealer Is Better
Some people believe that it’s better to buy a repossessed vehicle from a car dealer because they assume the dealer has inspected and fixed the vehicle. But there’s a catch.
The Truth: When a dealer buys a repo at a dealer-only auction (like Copart), they turn around and sell it to you with added fees and commissions. This increases the overall price. Dealers often mark up the vehicle significantly after getting it at a low wholesale price.
However, you can avoid these extra costs by buying repos directly from banks and credit unions. These vehicles are sold without middlemen, meaning there are no extra dealer fees.
Takeaway: The best way to get a good deal is to buy directly from banks and credit unions. You can find these listings on free platforms like RepoFinder.com, which connects buyers to repo listings from banks and credit unions nationwide.
5. Lie #5: You Can’t Get a Good Deal on a Repo Vehicle
Another lie is that repossessed vehicles aren’t good deals and that you’re better off buying new or certified pre-owned. This couldn’t be further from the truth.
The Truth: Banks and credit unions are eager to sell their repo vehicles as quickly as possible. They don’t want to hold onto the vehicle and are usually open to accepting lower offers. Most banks will list an estimated value or “Buy It Now” price, but this is just a starting point. In many cases, you can offer less than the listed price, and the bank will accept.
Because banks want to recover their losses fast, they often price repo vehicles lower than their market value, which makes it easy to score a great deal.
Takeaway: Don’t hesitate to negotiate when buying a repo. Banks are expecting it and are often willing to work with you to make the sale.
How Do Banks and Credit Unions End Up with Repossessed Vehicles?
When someone finances a car, truck, boat, or even a home, they agree to make monthly payments. If the borrower stops making payments, the lender (usually a bank or credit union) has the right to take back the vehicle or property.
Once the lender has repossessed the vehicle or property, they will resell it to recoup the money they lost. Banks and credit unions aren’t in the business of holding onto vehicles, so they price them to sell quickly. For buyers, this means a chance to get a quality vehicle at a discount.
Why Buying a Repo Is a Smart Choice
There are several advantages to buying a repossessed vehicle:
- No Commission Fees: When you buy directly from a bank or credit union, you avoid dealership fees and commissions.
- Lower Prices: Repos are typically sold below market value because banks want to sell them quickly.
- Financing Options: Many banks offer financing on the same vehicles they’re selling, making it easy to close the deal.
- Wide Selection: Repo vehicles come in all shapes and sizes, from cars and trucks to boats, motorcycles, RVs, and even real estate.
Final Thoughts
There are many myths about buying repo vehicles, but the reality is that they offer fantastic value. Don’t believe the lies people tell you about repossessed vehicles having branded titles, losing warranties, or being impossible to finance. The best deals are out there if you know where to look.
The best place to start your search is RepoFinder.com, where you can access a free list of bank and credit union repos across the country. By cutting out the middleman and buying directly from the source, you can save money and get a great vehicle at a lower price than at a dealership.