Bank Repossessed cars: Are they worth it?

We've all heard you can make a killing by buying a bank repossessed car. Deals go from 20-30% off to huge discounts of up to 90% if you know what you're doing ( and you're a little lucky ). However, are these cars really worth it? Can you find cars in somewhat good conditions or are they all trash, as some people say?

Well, let's start by saying what bank repo cars are: These are vehicles that have been repossessed by banks after the original auto loan couldn't be payed in its entirety by the original buyer. Once this has happened, the bank is allowed to sell the vehicle in a public auction to the highest bidder. Now, since the bank wishes to make some money back from the defaulted loan, the final price these autos go for is usually much less than their market value. But, does this mean these cars have any problems associated with their condition?

Not at all. In fact, a repossessed car for sale is usually a pretty new car and it almost always come with all papers in order. What's more, you can always check the car's history with a VIN check ( and you should, as when buying any other used car ).

In a word, bank repossessed car auctions and government car auctions are great places to buy used cars safely, while getting great deals in the process.

We'll get into more used car auction tips on my next post.

Where to purchase a repossessed car - Government car auctions and more.

Repossessed cars for sale are the new wave, particularly online. Hundreds of individuals are saving thousands everyday by buying their vehicles from government car auctions and repossed car auctions. How do they do it?

Let's first see what a bank repossessed car and a government car auction are. When someone cannot afford to make the payments on his or her car loan, the lien holder ( namely, a bank or dealer ) can regain possession of the car and resell it at a public auction. Now, if there was a government contract involved, these repossessed cars can be put on sale at a government car auction. Since the bank wants to make at least part of their money back, a repossessed car on sale is usually sold for much less than its market value. In some government auctions, vehicles are sometimes sold for as much as 90% less than its current price.

Great but, are these cars safe to buy? In a word: yes, they are. Repo cars usually are in very good conditions and the titles of vehicles sold at government auto auctions are generally ok. Of course, you should still check the car's mechanics, its VIN and all papers, but chances are everything will be fine.

On my next post, I'll explain how and where to find the best repossessed car auctions.

See you next time.