How do I Purchase a Bank Repossessed Car?
Many people overlook the option of buying a bank repossessed car simply because they are unaware that it is possible to purchase automobiles that have been seized in a bank repossession. While practices vary from one community to another, most banks are more than happy to sell repossessed vehicles to interested consumers. You may have the opportunity to purchase a bank repossessed car through an auction held by the bank or by talking with a loss prevention or loan officer at a local branch.
One of the more common ways to obtain a bank repossessed car is to qualify for and attend an auction held by the bank. In some areas, local banks will arrange for vehicles that have been seized after debtors defaulted on their car loans to be sold at a private auction. To qualify, it is necessary to obtain a letter of credit from your financial institution, affirming that you are approved for financing up to a certain amount, or that you have reserves in hand to pay for the repossessed car in cash. Once granted admission to the auction, you are free to look over the available stock, ask questions about each of the vehicles, and participate in the auction if you choose.
An alternative strategy is to consult with bank officers regarding any vehicles that have been recently repossessed and determine if one of those makes and models catch your interest. Many branches will maintain listings of recently repossessed vehicles that are in the control of the bank within a given geographical area. If one of those cars is of interest, you can determine what the bank wants for the vehicle, then arrange to inspect it. Assuming the car is in decent condition and worth the asking price, you can either pay cash to acquire the bank repossessed car or arrange for financing.
One of the benefits of purchasing a bank repossessed car is that banks are often anxious to offset their losses on the defaulted loan. This means that it is sometimes possible to obtain a good quality used car for considerably less than you would pay at a used car lot. If the vehicle in question is owned by the bank that you currently use for your personal accounts, arranging the financing can often be accomplished in a couple of hours rather than taking a day or two, making it possible to be on your way in very little time.
Just call your local banks or credit unions to get a repo list. Make sure you inspect it before making an offer, though. A good list of bank repo sales is online. Just make sure you know what you are buying.
I've seen some great bargains on repossessed cars for sale, but I've also seen people just break even or even pay a little more than the car was worth. I wouldn't go into a repo car auction expecting to come home with a Dodge Viper for $500. It would be more realistic to expect the low end of used car prices. Auctions can be tricky things, since two or more buyers may get into bidding wars and jack up the price of a particularly popular car way beyond reasonable.
One thing I'd caution people about before considering a repossessed car is the car's condition. I had a friend get his car repossessed and it took him several months to raise the money to get it back. Once he did, the repossession company took him to the secret lot where it had been stored. He said the car was an absolute mess, both inside and out. It looked like someone had taken the car out several times for a joyride and didn't care what damage he caused.
The bank may end up in possession of a car from a repo lot, but that doesn't necessarily mean it's been cleaned or maintained. I'd strongly urge people to inspect any repossessed car thoroughly for any obvious damage to the interior or exterior.
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