Apr 10
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1. Find repo auto auctions. You can begin by looking online at some of the websites that specialize in repossessed cars. Many of them have information about upcoming auctions and how to contact the correct department of local credit unions and banks to find out more. Some let you sign up for email notifications of upcoming auctions or let you search for specific cars. Also check online classified sites for listings or car auction announcements as well as the newspaper. Consider contacting additional local lenders to find out if they have upcoming auctions. Ones that are not as heavily advertised may have less bidders competing for the same cars.
2. Get your financing in order. Get pre-approved so will have the money available. Inquire beforehand about what types of payment the auction will take and when it needs to be paid in full. If you cannot meet their requirements, they will re-auction the vehicle to someone else.
3. Research car makes and models. Repo autos are not usually in perfect condition. Many owners will not bother with regular maintenance once they know that their car is going to be repossessed. That doesn’t mean the cars aren’t worth buying; you just need to be careful about which ones you purchase and realize that many of them will need a minor repair or tune-up. Use guides like Kelly Blue Book and Consumer Reports to get an idea about car values and which cars tend to have major problems. Have a general idea of what typical repairs and maintenance cost.
4. Go to a “practice” auction. Consider going to a repo auto auction just to watch the process without being involved. You will get to see how the bidding works and ideally can ask both the bidders and the auction workers questions. They may be able to give you some useful tips so you are more prepared when you are ready to actually bid on a vehicle up for sale.
5. Attend the preview. Sometime before the actual auction, there will be a preview of the vehicles available. When it is held will vary from just before the auction to a few days in advance. This is your chance to look at the car. Ask in advance how much you will be able to do. Most will not let you take the car off-site or test drive it, but often you will be able to at least start the car and look under the hood. You can bring a mechanic or knowledgeable friend to help you spot major issues if you do not feel confident doing it on your own. Look at the vehicle history including the CARFAX report and any maintenance records. You want to avoid cars that have been flooded, totaled or otherwise severally damaged as they typically have significant problems that you might not catch at first. Note anything that needs to be fixed and subtract those costs from what you want to pay for the car to determine your highest bid. You may want to set your ceiling about 10% less than that to cover any repairs you didn’t catch.
6. Bid at the auction. Remember to have your notes handy so you know which cars you want and what your highest bid is for each of them. Keep that firm in your mind so you do not overbid in the excitement. Remember if you do not get the first car, there are others available. Do not worry if you do not end up buying a car the first time. You do not want to buy the wrong car or bid too high. Instead be patient and get ready to attend another auction until you are successful.
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