What are repossessed cars?
Why are cars repossessed?
And, Where can I find repossessed cars for sale?
We have all the answers!
Repossessing a car simply means reclaiming ownership of a car that is still of value.
Several situations warrant for the repossession of a vehicle.
A car buyer may fail to meet up to his payment schedule as agreed with the lender, who could be a leasing company.
Also, a financial organization such as banks holding the car as a collateral resource, or even a car dealer who sold a car to a client and agreed to specific terms of installments payment which the buyer fails to meet up with.
Hence, the need and right for a reclaim in ownership of the car.
In the instance where banks or lenders repossessed cars, they seek the fastest way to sell off the vehicles to regain their money as the repossessed car is nothing but an asset to convert into cash.
That’s where the repo car auction becomes a good medium to sell off cars, thus allowing dealers or interested buyers to buy these repossessed cars at a reasonable price.
What is a Repo Car Auction?
After lenders or financial organizations take over a car due to the car’s initial owners failing to meet-up with certain agreed payment obligations, such a vehicle is labeled repossessed.
Getting interested car-buyers in buying these fairly used cars is through auctions called the repo car auctions.
By September 2019, close to 2.4 million vehicles were repossessed in the United States.
Over 5 million buyers had defaulted on their payment plan by more than 90 days.
In fact, there are more repossessed vehicles available for sale than new vehicles and different kinds of repo car auctions for car dealers and interested buyers to buy repossessed cars.
Repossessed cars cost far less than similar used cars in the market; therefore, the low price and the potential increase in profit to be made attracts car dealers and interested repo car buyers to these auctions.
However, do you know how to find repo cars for sale?
Finding Cheap Repossessed Cars for Sale
For the sole reason lenders, leasing companies, and financial organizations are primarily interested in getting back their money rather than making a profit, repossessed cars are cheaper than used cars.
They are available at a price even lower than the market value worth, and there are several places you can easily get repo vehicles for sale.
Purchase from Lenders
Banks or credit unions usually have a list of repossessed cars for sale as collateral from customers unable to settle loan debt.
You can contact banks and credit unions close to you if you’re looking for repo cars for sale.
These lenders are primarily concerned with getting back their losses and getting on with their bank’s primary business, and, therefore, repo cars are often cheaper at a reasonable price.
However, when buying a car on their list, make sure you know the market value before making a bid and inspect, even test-drive the vehicle before making the necessary payment.
Your proposal can be accepted, rejected, or put on hold; either way, you’re sure to get a response.
The only negative side of buying a repo vehicle from banks or credit unions is that there is no effort made to improve the repo car’s condition. You buy as it is.
For instance, if the vehicle has a broken windshield upon repossession, the banks will make no move to fix this defect before placing for sale, so it becomes the pending buyer’s responsibility to fix it after purchase.
Purchase from Repo Resellers
Repo Resellers are the middlemen between final buyers of repossessed vehicles and lenders.
They ease lenders off the responsibility of managing repo vehicles’ sales.
Instead, most companies would prioritize their core responsibilities over repo car sales responsibility; thus, Repo Resellers help move vehicles from lenders to buyers without taking ownership of the car.
Unlike buying directly from lenders, buying from repo resellers holds more benefits.
They improve the car’s condition to a specific standard, so buyers are guaranteed a car is in good working condition.
Also, they don’t put much effort into profit-making as they are rather concerned with moving large volumes of vehicles and would forgo being stuck with a vehicle and sell for a great deal of lesser price.
They focus on their primary responsibility, selling repo cars on behalf of lenders.
Purchasing from Used Car Dealers
Getting repo cars from used car dealers is one of the most guaranteed ways to buy repo cars for sale.
Buyers can be assured of a good working condition car; however, it comes at a hefty price as they are profit-driven.
Dealers look to make the highest profit possible in repo car sales and therefore, make a great effort to ensure the car is in good condition.
They include things like transportation cost, repairs, detailing, titling, and other extra charges in determining a car price.
Online Auctions
Online auction is the most significant, most straightforward, and yet cheapest means to get repossessed cars for sale.
That is because a reasonable percentage of repo vehicles find their way to an online auction, especially at times when the number of buyers surpasses the number of repo vehicles available for sale in a particular location.
One reputable online auction body with an extensive inventory of repo cars for sale is Copart.
Aside from conducting online auctions, they also conduct physical sales in different locations regularly.
To join these auctions and bid to have access to these cars, one must sign up for a membership at the official Copart website; however, registration is not free.
Once registered, one will have access to some of the vehicles placed for bidding but not all.
Only dealers with dealers’ licenses will have access to all vehicle inventory.
Nevertheless, if you’d like to get access to all vehicles, it is advisable to buy through an authorized Copart representative.
Police Repo Auctions
Police hold repo auctions when charged by the courts.
The vehicles in this kind of auctions are mostly from vehicle owners who lose ownership of these cars due to bureaucracy or unable to meet certain specific legal conditions to get back the vehicles.
Rather than the police holding this vehicle in their custody for too long, they hold repo auctions.
6. Lender Repo Sales auction
When lenders have confirmed that people are interested in buying repo vehicles in their custody, they arrange auctions too to the wider public.
So you can as well check up with various leasing companies and financial organizations of their intended date to hold a repo auction.
What is the Most Convenient Way to Buy a Repo Car?
Online auctions are the most convenient way to purchase repo vehicles.
It gives access to thousands of repo vehicles and delivers them straight to your home.
IAAI and Copart are some of the reputable online auction sites to bid for repossessed cars for sale.
Take note bidding as an individual; you wouldn’t get access to all cars as this online auction favors legitimate car dealers.
Hence to gain access to the entire repo inventory, you either get a dealer license or have an authorized representative like Auto Auction Mall bid on your behalf.
What to Know Before Buying Repossessed Cars for Sale
- Repo cars for sale costs lesser than the average market value
- The car’s history may not be readily available
- Don’t expect a perfect vehicle
- When bidding, consider other possible costs of repairs or replacements
- The keys may not be available
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