7 Things to Avoid When Buying Repossessed Cars

Buying repossessed cars can save you BIG BUCKS if you know what you are looking for! First, the vehicle has already depreciated.  Second, you cut out the middle man and high dealer markups. Third, repo cars are often sold highly discounted because lenders want to get rid of them.

The only catch is making sure it’s not a lemon.  Major repairs eat up savings fast.  The following are seven tips to help you avoid buying a lemon on wheels when considering repossessed cars.

1.  Clouded Title. A “clouded title” means that the owners of the car are not clear or there is still a lien on the car. Maybe the car was used as collateral for an additional loan and could be repossessed if that loan isn’t paid back. You always want to make sure that the title is clean and free of all liens. The person or entity selling the vehicle should own it.

Ask for a CARFAX report or run one yourself. It should help you avoid many of these issues, but it is a good idea to have a mechanic look at the car too if something doesn’t seem right. Remember, there are always cars being repossessed; something better
will come along soon enough.

2.  Salvaged or a Major Accident. If an auto was so badly damaged it was totaled out, the state DMV will have issued a “salvage title” for it. This means that the car has been rebuilt after that accident. If the insurance company totaled it out, but it wasn’t bad enough for the state to issue a salvage title, a CARFAX report usually indicates that, so you know that there has been significant work done. Physical signs include mismatched paint, bolts, screws and other pieces of the car, as well as welding work.

3.  Flooded. A car that has been flooded, or filled with water, is dangerous to drive. Frequently, after floods and hurricanes, cars are shipped to other parts of the country to be sold to unsuspecting buyers. Look for musty or mildewy smells as well as mold, mildew and dampness.

4.  Strange Engine or Transmission Noises. When you run the engine and shift through the gears of the transmission, listen for unusual sounds like knocking. These can be signs of problems with the engine and transmission, possibly that they need to be rebuilt, which is an expensive repair.

5.  Squealing Brakes. If the brakes squeal when you use them, then the brake pads probably need to be replaced. There may be additional brake work that needs to be done. Think carefully before purchasing a repossessed car that needs extensive brake work. Be sure to figure in the cost of the repairs when you decide on a price.

6.  Oil Leaks. Leaking oil can mean that the engine parts are not getting the oil they need to run correctly. If it goes completely dry, the engine will seize and stop working. A bad oil leak may have already damaged the engine so much that it will need to be replaced. Other fluid leaks could lead to the failure of additional systems. Leaks also frequently indicate a poor record of maintenance and could mean that the car will need other repairs.

7.  Interior Smells. If a car smells bad, whether from smoke or mildew or something else, it is usually really hard to get that smell to go away. Those cars are best left to someone else who doesn’t mind the odor.

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