Why Buy Foreclosed Cars?

The main reason most people want to buy foreclosed cars or repo cars is the low prices. Car and truck foreclosures occur 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 car 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 buying the foreclosed truck. 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 Foreclosed 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.

Related Articles You Might Be Interested In

Avoiding Car Repossessions

Pros and Cons of Online Car Auctions

Six Steps to Finding Foreclosed Cars for Sale

Tags: auto auctions, car auctions, car foreclosures, foreclosed car, foreclosed car guide, foreclosed cars, foreclosed cars for sale, foreclosed truck, repo car, repo car auctions, repo cars, truck foreclosures

This entry was posted on 07/12/2010 at 10:19 pm. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Posted in foreclosed cars by 8 Comments