When shopping for a repossessed car or truck, you’ll notice that the prices are much lower than what you would pay for a used vehicle from a dealership. This can make some buyers skeptical, but you don’t need to be. As long as you do your research, ask the right questions and perform an inspection before buying, you should have no problem finding a repo vehicle that is priced 25% to 40% lower than the cost of a similar used car.
Here are some reasons why repos cost less than similar used vehicles.
Unknown Condition
The main reason why repos cost less is because their condition is unknown. When a vehicle comes to a dealership, a mechanic inspects it. Major problems are addressed, and the vehicle is cleaned and ready for a new owner. While helpful, all of this work adds to the price tag of the vehicle.
In the case of a repo car, there is no mechanic to check it out. It’s repossessed from the original owner, and if they can’t catch up on payments, the vehicle is sold through the lender or an auction. The highest bidder then gets the chance to inspect the vehicle before taking it home.
It’s true that some repos are lemons, but many others are in good condition. They may need an oil change or new tires, but they’ll make a great vehicle. However, it’s up to you to make sure you’re buying a good car, which is why the savings go to you.
Recoup Losses
When banks and lenders take back vehicles from owners in default, they just want to recoup some of their losses. Their business comes from lending money to people – not selling cars. Therefore, they want the vehicle off their lot as soon as possible while also getting something out of it.
There are several websites that specialize in selling repossessed cars, but not all are free. If you want to browse repossessions in your state at no cost, check out RepoFinder.com. Click on your state and view the repos up for bid. Most have descriptions that allow you to see what features the cars and trucks come with, as well as if the seller is accepting bids.
Maintenance and Repairs
Generally speaking, people who let their car payments go into default are not scheduling regular maintenance. This means that many repos require maintenance and repairs to get them up to speed. With this in mind, banks and lenders price the vehicles at a competitive price so that they are still a bargain even with the added work.
The newer the car is, the less likely it is to need maintenance and repairs. So, if you don’t want to put a lot of work into a repo, we recommend sticking to vehicles that are less than 18 months old. Additionally, there is a large supply of lease returns around 3-4 years old that you can buy cheap.
If you’re looking for an affordable vehicle for yourself or someone else in the family, a repo is a great option. Don’t be scared away by the low prices. You’ll have to assume more responsibility, but as long as you don’t mind taking this on, you can be successful in finding a great car at a great price.