Buy Repo Cars at Massive Discounts

The credit crunch has had many, many unfortunate economic casualties. Small business owners have gone out of business and homeowners lost their homes due to a deadly wave of foreclosures. The reason is very simple. Tightening economic activity has resulted in more and more consumers loosing their jobs and therefore unable to pay their monthly commitments. This is also true for many folks that used financing and other payment plans to buy their cars. Most people simply do not have the financial resources to buy their cars and other vehicles outright. They need credit to do it and banks have freely made this available over the years. The downside is that if they stop making payments, the cars are repossessed. This is unfortunate, but also creates the opportunity for folks to buy repo cars at very cheap prices.

Over the last few years, many states have passed a variety of consumer protection laws, making it more difficult for these cars to end up in the auction lanes. However don't let this fool you. We still have the opportunity to buy repo cars at auction events for potentially well below their true market value.

What the final prices for the car sold is, depend on how fierce the competition is at the auction event. The rules are a little vague regarding how financial institutions can dispose of these repossessed vehicles. Most laws dictate that it needs to be sold in a commercially sensible manner. As you can imagine, this is a pretty ambiguous term. Don't let it bother you however. Dig around to find those bargains. If the courts at a later stage find that the bank or financial institution accepted too low a price, it's not your worry, and rather an issue to be faced by the transgressor (i.e. the bank).

The same rules apply when you buy repo cars. Before the auction, make sure that you do a good inspection. It's doubtful that you'll have the opportunity to test drive the vehicles, but a thorough, close look at the car for mechanical and other problems will 'paint a good picture' on whether it's something worth bidding on or not. A useful tip to keep in mind on the day of the auction is that sometimes the previous owners also attend the event to drive up the prices artificially (this will play in their favour). Be alert for this, and stop bidding when you don't feel comfortable with the pricing level anymore.

By Jake W. Johnson