When you are trying to find repo cars or repossessed cars for sale, it can be frustrating because the information is not easily accessible or you may have trouble finding out the details that will help you find more cars. It is important to know not only know where to look, but how to look and what additional questions to ask, so you can find more cars and better selection.
Banks and Credit Unions
Start by contacting local lending institutions like banks and credit unions that make auto loans. When someone defaults on their loan and stops paying it back, the lender takes back or repossesses the car. Then they need to do something with the repo car. Since they are the ones who repossess the vehicles in the first place, they are a great source to find repo cars for sale.
Keep the following things in mind when talking to lenders:
- If the first person you talk to doesn’t know anything about repo car sales or auctions, ask to speak to someone else. It might take more than one person to get to the one who knows the correct information.
-Ask lenders about pre-sales and non-auction sales. Some lenders, especially smaller ones, may sell off their repo cars on their own or allow you to purchase a car before they send their inventory to an auction company. Buying directly can be more convenient because you will have more flexibility about when you can see the cars rather than the set time of auctions and you will usually be able to test drive them, something you can’t do at the auctions.
-See if they will send you a list of what they have recently repossessed so you know right away what will be available for sale soon.
Local Auction Companies
Since an auction company will run the repo auto auction, you can contact local auction companies and ask them if they handle any repo car sales. If they do, request information about future auctions and whether they typically have them at the same times and places or if those vary. If they don’t, ask if they know which companies do handle them. Be sure to get the auction listings and information about the auction rules so you can go to the auction prepared.
Online Repo Auto Sites
There are many websites that list repo cars available for sale around the country. These typically will have all the information about future auctions, including government auctions of surplus and seized property where you can also find good deals. Typically these sites require you to pay a fee to become a member and get access to all of the information they have. These types of websites can be particularly helpful if you plan on attending multiple auctions regularly as they do the finding for you, saving you time so you can focus on deciding which vehicles look like good choices to bid on.
Local Newspapers
Though you may not frequently see ads for repossessed cars for sale, most auctions open to the public put at least one ad in the local paper. Often there is a special section and particular day of the month that these ads are printed. It is much easier to call the paper and ask when and where they will be printed instead of scouring the paper every day.
Auction Sites
Since an auto auction needs a lot of space, they are typically held at the same places. Once you have found a few popular auction sites, you can look for signs each time you drive by them in the future. This will help you spot auctions that are not well-advertised anywhere else.
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Why Buy Foreclosed Cars?
The main reason most people want to buy foreclosed cars is the low prices. When someone is no longer making their car payments and they do not get current with the loan, the bank ends up repossessing their car. These cars are then resold to the public, typically at large auto auctions where the winning bid can be 50% or more below market value. While the banks want to get the
highest price they can, they accept the winning bid whatever it is.
Where to Find Car Foreclosures
The best selection of vehicles will be at the repo car auctions. Depending on the size of the auction, they could be selling 100’s of cars that day. You can also find online auctions, either ones that are solely done online or those that allow online bidding as part of a live auction. As long as you are comfortable buying a car via the internet, it is very convenient to purchase one
that way. You can look online for auction info on the many repo cars auction websites or call auction agencies to find out who handles local car auctions.
You can also contact local lenders, especially smaller credit unions, that may sell repo cars on their own or use a third-party dealer. Auction prices will be lower and usually you won’t get much of a price break, but sometimes you can negotiate a lower price on a car they’ve had for awhile and really want to sell.
What Repo Cars to Buy
The first thing you need to think about when choosing which cars to bid on is why you are buying it. If it is for yourself, pick the vehicles that will fit your needs. If you are looking to resell for a profit, choose ones you can purchase cheaply, are likely to sell quickly and need minimal work to get them ready for prospective customers.
Unless you want a car specifically to fix up, avoid those that has a lot of major problems or that are likely to have hidden issues. You don’t want to get it for a great price only to find out all the repairs are going to eat away the amount you saved. Be aware that the more popular cars with more bidders interested in them usually go for much more. Try to find cars that don’t seem to be
getting much attention during the preview period but are still in good condition for the best deals.
How to Buy At Car Auctions
You need to register to bid at the auction (usually you’ll need a valid photo ID) and have your deposit or the complete payment (depending on how the auction works) available in the right form since most auctions are very particular about what types of payment they will accept. You should find out all this information in advance so you are prepared. Make sure to have any
financing worked out before the auction since most require full payment in 72 hours or less from the auction close.
Attending the inspection or preview time is important because that will be the one chance you have to thoroughly inspect each vehicle you’d like to bid on. Using the condition of the car, you can pick a maximum bid for each one, which helps you not overbid. A quick way is to take the trade-in value and subtract the cost of repairs (or around 10-15%). At the auction, double-check your notes before you bid so you know you are bidding on the right car. Many look alike and it goes fast so it is easy to make mistakes. Bid confidently and stop when you hit your maximum. Another car will come along. Be patient and wait for that good deal. When you are the highest bidder, complete your purchase and enjoy your new car for much less than you would have paid anywhere else.
1. Many bank repossessed cars are newer makes and models.
A common assumption is that all repo cars are old clunkers that have been overused and abused and are ready to fall apart. However, that is not the case. Many car repossessions happen on new luxury cars that come with higher price tags and monthly payments. An owner may take out a larger loan than they can afford or some financial hardship may affect their ability to stay
current. It is much easier to manage lower amounts or to catch up later when money is tight than with the high payments on nicer, newer cars. Since new cars depreciate so rapidly, it is hard to sell them for the amount still owed on the loan, making them more likely to end up repossessed.
2. Bank repossessed cars are often in good condition but not always, so inspect carefully.
While many are in good or great shape, there will be some that look okay but have some major mechanical issues. There will usually be a preview time where you can turn the car on and look under the hood to help you spot those problems before you bid. While a car that needs a little work will likely go for less, those that need too much are usually not worth it once you figure in the cost of all the repairs. Unless you are looking for a project, it is better to pass on those.
3. Not all cars at repo auctions were actually repossessed.
It is not uncommon for vehicle auctions to mix where the cars came from. It may be billed as a repo auction, but there could be seized, salvaged, surplus and vehicles from other sources mixed in. If you can find out where a car came from, that will give you a good idea of what problems it might be hiding and its likely condition. Salvaged cars are the ones to be the most leery of since
they were often in a major accident or flooded and the previous damage may continue to affect the car even if it looks like it was all fixed.
4. While most experts say not to bid more than trade-in value, sometimes that is too much.
Using the trade-in value is a general rule of thumb, but that can be too high a bid for many bank repossessed cars. You need to take into consideration how many things need to be fixed and how much that will cost and lower your highest bid accordingly. Used car guides are intended to be general guides and may not accurately reflect values in your area, something you should
definitely be aware of if you plan on reselling the car for a profit.
5. The starting bid is not always an accurate predictor of the winning bid.
The winning bid will be whatever someone is willing to pay for the car regardless of the price it started at. Each bank repo car will have its own starting bid. Sometimes these are set artificially low to attract more interested bidders. Other times there are just typical assigned beginning amounts based loosely on the car’s condition and value. A car with a higher start bid can sell for much less than one with a lower beginning bid. Some cars will sell for just over that first amount while others will end up going for thousands more.
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Seized car auctions are popular with people looking for a really cheap car or those wanting a nicer car at a lower price. Cars may sell for half their retail price or even less at these auctions. Follow this guide to get your dream car for a fraction of its value.
How to Find Seized Car Auctions
The internet is the easiest place to start your search for auctions. You can start with the following three sites or just use a search engine to find as many as you can: www.Gov-auctions.com, www.USGovernmentAuctions.Net, and www.car-auction.com. Be sure to check out several sites to get the most information as they don’t always have all the same auctions.
You can also look at the webpages of various government agencies, like the police and IRS, that seize cars. If you cannot find any auction details or you want additional information, try contacting the local offices of those departments. Ask for the person that oversees the auctions to get the most accurate information the quickest.
How to Prepare for the Auction
Look over the list of what will be available at the upcoming auction and note any cars that interest you. Next, use a reliable used car guide like the NADA or KBB to get a general idea of the car’s value. Most experts agree that you shouldn’t bid more than the trade-in value of a car at an auction, so keep that in mind for your absolute ceiling price.
Also, you should work out any financing you need well before the auction begins. Most seized car auctions require payment in full or a significant deposit at the end of the auction, with any remainder due sometime in the next 24-72 hours. This does not leave much time to work out a loan if you will need one. It is better to arrange that in advance. Be sure you have your funds readily available in the right form since most auctions are very particular about the types of payment they will accept.
How to Make the Most of the Inspection Preview
Generally, auctions allow you to preview the cars before you bid. You will generally not get to test drive them, but you can turn them on and look them over. Be as thorough as you can in the time available and plan to look at your top few choices at least. If you have extra time, you can inspect any other cars you are considering. Based on their condition, you can update your maximum bid for each car.
How to Bid at Auction
Seized car auctions move quickly, so arrive early enough to get registered and be ready to bid before the first car comes up. When bidding begins on a car you want, double-check it is the right one first because cars can be very similar. You cannot take back your bid, so be sure you have the correct one. Don’t worry about being the first to bid – it is usually best to let someone
else start the bidding anyhow.
Make your first bid and then continue bidding while the price stays under your maximum. Keep that amount in mind and stop bidding before you overbid. Overpaying doesn’t make any sense, especially when there are always more cars available. At the end of the auction, you will need to finalize the transaction for any auctions you won.