If you’re in the market for a used car then you might be considering getting a bank repossessed unit. Somebody else’s loss could be your gain. Repossession works when banks take back cars from people who fail to repay their car loans and then put on sale.
What makes Repossessed units attractive?
Repossessed units are attractive due to their low prices. These prices are much lower than what the car initially sells for, with units being sold between 20 to 30 percent of the car’s standard retail price. It can also be much cheaper than what second-hand dealerships and private sellers value their vehicles at. Banks may also offer promo prices for these vehicles. These vehicles are often already considered a loss by the bank and therefore the bank wants to reduce its inventory as quickly as possible.
How does a vehicle get repossessed?
Repossessed vehicles are for sale because their former owners could not keep up with their loan payments. It means that these vehicles are only a few years old and with low mileage on them. The vehicles may also still be under warranty. But keep in mind what you see is what you get and there is no haggling in this situation. If a modified vehicle comes up for sale, the modifications come with it upon purchase.
How are repossessed vehicles stored?
Repossessed units are often stored in warehouses. It means that these units will not be in the best exterior condition and will often be caked in dust and dirt. When inspecting a bank repossessed unit, be as thorough as possible. In some cases, the warehouse will not let you open up the vehicle and will not let you start or test drive the vehicle, so keep that in mind.
How to check a repossessed vehicle?
Bring a mechanic when inspecting a repossessed vehicle at the bank warehouse. Even if the access to the vehicle is limited, it still doesn’t hurt to bring an expert to visually inspect the vehicle. Leaks should be apparent since the vehicle will have been sitting for a while. Next, make sure to review the vehicle’s service records if there are any. It lets you gauge the general mechanical state of the vehicle if you decide to purchase it.
Where do you go to buy a repossessed vehicle?
If you're in the market for a repo unit, you can check out the repossessed cars segment on our website. It will show you detailed pictures of the vehicles in the bank warehouses. It also includes the milage, key features, and the coding number of the car. Another option you have is checking out bank websites as they offer a similar kind of information but may often not include photos.
Having this information will help you understand what you are getting into prior to seeing the vehicle in person. Going directly to a bank warehouse is another option but you need to know where to look. Something to take note of is that these cars will be dirty. The cars are only parked there for storage and that's about it. These cars are also on an “as is where it is” basis so what you see is what you get.
What to do when you want to buy a repossessed vehicle?
If you really want to buy a repossessed vehicle make sure you do the proper research beforehand. Make sure that you research the market value of the vehicle of your choice. In addition, make sure to check out the bank website for repossessed vehicles as basic information is there.
Be ready to bid and bid a lot. These bank-owned vehicles are often auctioned off to the public. This means that people will be bidding on the car they want and the highest bidder gets the car. With such an enticing price, don’t expect the bank to take your first bid for the unit you want. There is also a minimum bid in place for vehicles. It serves as the minimum price the bank will sell the car to you.
Paper work is still part of the transaction process for buying a repossessed vehicle. Depending on the bank you might be sent from office to office once the bank accepts your bid for your chosen vehicle. Once the bank sells you the vehicle, it's a perfectly legal transaction so you will know that your money is safe when buying.
Are car financing options available for repossessed cars?
Some banks may even offer financing options for repossessed units. The advantage here is that it is considered as a full cash payment and you won't end up paying interest on the side over time. An auto loan is much easier for your finances thanks to affordable monthly installments
What are the risks of buying a repossessed vehicle?
A repossessed unit has an uncertain condition. The banks repossess the vehicles as is, in the condition the previous owner had the vehicle in. The condition of the vehicle will be dependent on driving habits and how well the previous owner took care of the car. Chances are, the vehicle might not be in a well-maintained condition. The buyer will shoulder the risks, including any defects the vehicle comes with along with the general quality of the car. You can't run after the bank after your purchase. The bank is no longer liable for any damages or defects you spot after you purchase the vehicle.
You will need to do your research to look for the best possible deal. This won't be easy as you might need to hop from website to website to get the best deal. It might event entail hopping from warehouse to warehouse. Expect to send out a lot of bids for units. Banks may reject your bid if it’s below their floor price which is the minimum amount the bank sets for each repossessed cars for sale.
Are repossessed vehicles recommended?
If you don't mind putting work in for researching the best deals out there, then a repossessed unit is for you. Buying a repossessed unit has its risks but if you do your research well and inspect the vehicle thoroughly before bidding you might have a great deal on your hands.