Buying repo cars can save consumers thousands of dollars and enable them to sell their vehicle later without being upside down. In this article we will go over where to purchase a repossessed vehicle, what to look for, and also how to determine if you’ve found a good deal. After reading this article you should be able to start shopping for some repo cars.
Where You Can Buy Repossessed Cars
The most common place to purchase a repossessed car is at a dealer’s auto auction. These auto auctions are located in almost every city across the country. Some of the biggest ones are Manheim, Adesa, and Brashers just to name a few. However, you must be a licensed dealer to purchase a car from one of these sales or know a dealer who will buy the vehicle for you. Usually a dealer charges some kind of commission for their services though. Sometimes you might be able to find repo cars at public auto auctions but this is highly unlikely. You can also purchase repossessed vehicles directly from the bank that owns the vehicles. This is usually the most advantageous choice since your dealing directly with the owner. Therefore, you cut out the cost of paying the dealer a commission and the auction any buying or selling fees.
What to Look for When Purchasing a Repossessed Car
Some of the cars you will come across will need major repairs and cleaning. The reason for this is because it is common for the owner who fell behind on their car payments, to lack the money for general repairs and maintenance. You will probably have to look at a few cars before you find that one car that could be considered a diamond in the rough. If you aren’t very familiar with cars or aren’t mechanically inclined you should definitely consult with a mechanic. Have the mechanic evaluate the engine, transmission, drive train, and seals and gaskets. These will be the most expensive items that could detour you from purchasing the vehicle.
How to Determine What to Spend on a Repossessed Car
After you have found a few repossessed cars that you think will work for you, you need to determine the cost of the vehicle plus any repairs it will need. When determining your bottom dollar you should go off a black book or wholesale value, this is what dealer use. The purchase price plus repairs shouldn’t exceed black book value or it generally won’t be worth your investment. In addition, this will keep your total investment well below NADA and or Kelly Blue Book retail values. Therefore, if your purchase price plus the cost of repairs doesn’t achieve this value then you need to keep looking for a better repossessed car to buy.
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