Buying repossessed (repo) cars can save you a fortune but you should try to find out if you are getting a good deal. Many lenders are allowed to repossess cars if their owners have failed to make their payments. However, it is in the lenders best interest that the car owner makes payments as they depend on the interests on those loans for their profits. As such they will work for months with the car owners to make sure they can still make payments. There is often a ten-day grace period given to owners after defaulting so they can try to pay the installments. Once the owner is served with the repossession papers, he becomes negligent. He might dismantle the engine, rip out upholstery, or may neglect the upkeep of the car.
So, if you are planning to purchase a repo car on sale, you must follow the below-mentioned tricks.
Purchase from the lender directly
In case of a repo car sale, you must try to purchase the car directly from the lender. The bank or credit union will allow you to inspect the repo file, which lists all the cars that have been repossessed. The bank usually wants to recover its losses so they might even provide financing for the car, which you are going to purchase. However, the bank does not bother itself with repairs and maintenance, so be sure to inspect the car well. When making a bid, ensure that you look at the NADA guide. If you do not know much about cars, get a mechanic friend with you who can take a better look at the car.
Repo reseller service
You can also purchase from a repo reseller service. They usually take many repossessed cars from the bank as inventory and help move them. The reseller will have to incur some expenses before the car is moved to his lot. However, he would not be inclined to tack on heavy margins as it is a volume game and he needs to move as much inventory as he can. The reseller will also ensure that the car is in good condition. Try to make a bid a little over the minimum and avoid paying inspection fees or any other unnecessary charges.
Used a car dealer service
Try to buy a car from a used car dealer service to avoid auctions. They make some improvements to the car such as better tires and mats, among others. It is important to research and then buy the car. These car dealers sometimes also give a 30-day warranty.