Ultimate Guide to Purchasing Repossessed Vehicles at Auction

Acquiring repossessed (repo) vehicles can be a cost-effective choice, but it's crucial to verify the quality of the deal. When owners default on loans, lenders are authorized to repossess the vehicles. However, lenders prefer owners to continue payments since they rely on loan interest for profit. Typically, a grace period of around ten days is granted before repossession occurs, giving owners time to catch up.

After repossession, owners may neglect their vehicles, damage parts, or fail to maintain them.

If you're considering purchasing a repo vehicle, follow these essential tips.

Buy Directly from the Lending Institution
When shopping for repo cars, aim to buy directly from the lender, such as a bank or credit union. They provide access to repossession records, allowing you to inspect available vehicles. Since lenders want to recover their losses, they might even offer financing options. Remember, the lender isn't responsible for repairs, so thoroughly inspect the car—consider consulting a mechanic or using the NADA guide to assess value.

Alternatively, you can purchase through a repo reseller. These companies acquire repossessed vehicles from banks and sell them in volume, often ensuring vehicles are in decent condition. They usually keep prices competitive, and it’s wise to bid slightly above the minimum to secure the vehicle while avoiding unnecessary charges like inspection fees.

Buy from a used car dealership service
For convenience, consider buying through a used car dealer specializing in repossessions. These dealerships often make upgrades like new tires and mats, and some offer warranties, making your purchase safer.