You can realize big savings by investing in a repossessed vehicle often sold at a pittance at auctions. If you cannot afford to make a new car purchase, opting for a repo car is a smart decision. With a bit of research and evaluation, you can acquire a great car for a really good price.
What are repossessed vehicles?
People who fail to meet car loan or hire purchase payments and conditions stand the risk of their vehicles being reclaimed by creditors. The vehicles are then sold by creditors at offline and online auctions.
To take advantage of these deals, keep an eye out for public auctions of bank-repossessed vehicles in your city or area by scanning the newspapers. You can also look up online auction sites that sell government repossessed vehicles and those seized by the police.
Why invest in repos?
It is estimated that repossessed cars can save you anywhere between 50% and 70%, making them excellent bargains. Imagine buying an otherwise expensive sports car or a spacious SUV that your family can really use at a fraction of its market value.
You don’t have to worry about hidden fees or commissions when you buy repo cars directly from banks and credit unions. They are just looking to sell these vehicles as quickly as possible, and almost always at a loss. This translates into savings for you.
If you require financing to purchase the repo car, you can easily get a good deal from credit unions and banks. There is a lot of scope for negotiation, with low interest rates and cheap prices a given in most cases.
Cars, trucks, boats, recreation vehicles (RVs), etc. are all sold at auctions, so the choices are varied. After considering multiple auctions, zero in on one that appeals to you and carefully review the vehicles on its lot. Despite what you may hear about the woeful conditions of some damaged repo cars sold at auctions, these are rare instances and most cars are in a good condition, if not impeccable, needing little or no fixing.
What to keep in mind before purchasing a repossessed vehicle
The condition of the car: A quick inspection of the car you are looking to bid on is essential. Besides appraising any damages to the body, conduct an engine and transmission check to ensure that the car’s electronics are fine.
Based on the car’s condition, calculate how much it would cost you to repair or replace any parts. Factor this in to deduce your total out-of-pocket costs of acquiring the car.
Maintenance and running costs: Just as you would when you buy a new car, evaluate the costs of running and maintaining the repo car. It is quite easy to get carried away by the low costs of obtaining a repossessed car. To avoid a hasty decision, do the math before you start bidding. And always be sure to check out how much the car is worth by referring to authoritative resources like Kelly Blue Book or Edmunds.
Credits: Photo courtesy of Jimmy Baikovicius.