Repossessed cars offer a cost-effective option for purchasing a vehicle, often at significantly reduced prices. Learn how to find and buy repossessed cars, including understanding the auction process and assessing vehicle conditions. Maximize your savings while securing a reliable vehicle.
What Are Repossessed Cars?
Repossessed cars are vehicles that have been taken back by a lender, typically a bank or credit union, after the borrower has defaulted on their loan payments. These vehicles are often sold at auction or through dealerships that specialize in selling repossessed cars.1
There are a number of reasons why a car may be repossessed. Some of the most common reasons include:
- Default on loan payments: This is the most common reason for repossession. If a borrower misses a certain number of loan payments, the lender may repossess the car.
- Bankruptcy: If a borrower files for bankruptcy, the lender may repossess the car as part of the bankruptcy proceedings.
- Fraud: If a borrower provides false or misleading information on their loan application, the lender may repossess the car.
Why Buy a Repossessed Car?
There are a number of benefits to buying a repossessed car.2 Some of the most notable benefits include:
- Affordability: Repossessed cars are often sold at a significant discount compared to new or used cars. This can make them a great option for budget-minded buyers.
- Selection: Repossessed car auctions and dealerships offer a wide variety of vehicles to choose from. This means that buyers can find a car that meets their needs and budget.
- Potential for a good deal: Repossessed cars are often sold “as is,” which means that the buyer is responsible for any repairs or maintenance that the car may need. However, this can also mean that buyers can find a great deal on a car that just needs a little TLC.
Repossessed Car Buying Considerations
While there are a number of benefits to buying a repossessed car, there are also some things to consider before making a purchase. Some of the most important things to keep in mind include:
- Condition of the car: Repossessed cars are often sold “as is,” which means that the buyer is responsible for any repairs or maintenance that the car may need. It is important to have the car inspected by a mechanic before making a purchase to get an idea of the condition of the vehicle.
- Title issues: Repossessed cars may have title issues, such as a lien or salvage title. It is important to do your research and make sure that the car has a clear title before making a purchase.
- Warranties: Repossessed cars typically do not come with a warranty. This means that the buyer is responsible for any repairs or maintenance that the car may need after purchase.
Learn More About Repossessed Cars
If you are considering buying a repossessed car, there are a number of resources available to help you learn more about the process. Some of the best resources include:
- The National Automobile Dealers Association (NADA) website has a wealth of information on buying a repossessed car, including tips on how to find a good deal and what to look for when inspecting a car.
- The Federal Trade Commission (FTC) website has information on consumer rights when buying a repossessed car, including tips on how to avoid scams and how to get a refund if you are not satisfied with your purchase.
- Your local Better Business Bureau (BBB) can provide you with information on reputable dealerships that sell repossessed cars.