Repo Car: How to Buy One & MUCH More
I am a serial entrepreneur and a consumer advocate. When I’m not helping car buyers, I love working on ventures that have a positive impact.
If you are looking to get a great deal on a vehicle, you have many options. For instance, you can purchase a quality used vehicle from a rental car company, or you can purchase a demonstration vehicle from a dealership.
However, one of the most interesting ways to score a deal on a used vehicle is to purchase a repo car.
Here, we will look at what a repo car is, where to buy one and why you may want to consider this type of vehicle.
Which option is right for you? Buying a new car or a used car.
Table of Contents
What is a Repo Car?
A repo car or a repossession car is a vehicle that has been repossessed by a dealership or a lender when the vehicle owner fails to make the payments for the vehicle. Every year, there are 2 million cars that are repossessed or about 5,714 cars per day.
Where to Find Repo Cars
There are a number of places where you can find a repo car. These places may not be where you’d expect. Here are the four places to get started with your search.
- Banks and Lenders. Many banks and lenders will repo a car at some point. After the lender's bank has repossessed the vehicle, they will want to sell the vehicle as soon as possible. In fact, you can purchase the vehicle directly from the bank or the lender.
- Online Repo Car Auction. There are a number of online repo car auction sites available. Chances are that you can find all types of vehicles for sale. Some of the best placed to get started with online auction repo car auctions include Copart, Bidndrive, and BSCAmerica.
- Police or Government Auction. There are also a number of police and government agencies that will sell repossessed vehicles. If you want to purchase a repo car from a police or a government auction, contact that particular agency. These agencies tend to have weekly or monthly vehicle auctions.
- Used Car Dealer. Just about all used car dealers who finance vehicles will have to make a car repossession. When they get the car back, they will put the vehicle back on sale.
Repo Car Benefits
There are several reasons why you may want to consider purchasing a repo car. Here’s a look at why repo cars may be a great choice for you:
- They Are Usually Affordable. In many cases, a repo car will be offered at a lower price than the same type of vehicle that is not sold as a repo car. That’s because some buyers are uncomfortable with purchasing a repo vehicle. This can provide you with the opportunity to get an excellent deal.
- Many Repo Cars Are in Good Condition. Some repo cars are in relatively great shape. For instance, someone may purchase a vehicle and lose the car because they stopped making payments after a few months. If you are looking to get a great deal on a late model vehicle, then a repo vehicle is a top choice.
- You Can Sometimes Get a Great Deal at Auction. Many repo vehicles are sold at auction. That means that the vehicle has to sell right now. In some cases, you can be the only bidder on the vehicle. If you meet the buyer minimum, then you can score a great deal on the vehicle. Learn more about buying an auction car here.
Repo Car Drawbacks
While there are some great reasons to purchase a repo car, there can be some drawbacks. Here are some reasons why a repo car may not be so great for you:
- The Vehicle Is Usually Sold “As Is”. In many cases, the vehicle seller will not take the time to prep the vehicle for sale, unlike CPO vehicles. That means that you are going to purchase the vehicle “as is". This could be an issue if the vehicle has some serious mechanical problem (i.e. shaking car) that is not apparent by merely looking at photos of the vehicle if you are looking to purchase it at an online auction.
- Lack of Historical Information. When purchasing a vehicle, knowing the historical information is important. With a repo car, there is usually not much information for you to use to gauge the vehicle's history. Therefore, you have no idea if the vehicle was properly maintained or if the vehicle has been in an accident.
Should I Buy a Repo Car?
It may be a good idea to purchase a repo car under a couple of conditions. First, you will have to understand that you are purchasing a vehicle with no detailed history and that the vehicle is being sold “as is". If you are looking to purchase a later model repo vehicle, you may not have to worry too much about the vehicle history and condition.
However, if you are looking to buy an old repo vehicle, you may want to have some experience gauging the condition of a vehicle.
Frequently Asked Questions
Is it OK to buy a repossessed car?
It is okay to buy a repossessed car if you understand that you are buying a car “as is” and there will not be must historical information about the vehicle. However, you can get a great deal on some repo cars.
Where can you buy a repo car from?
You can purchase a repo car from a bank, lender, used car dealership, and online repo car auctions.
Are repo cars cheaper?
Repo cars tend to be cheaper than comparable cars because they are sold “as is”. That means that the seller has done no prep work to make the vehicle look “showroom ready” for the buyer. Sometimes this is not a big deal if the vehicle’s issues are merely cosmetic. However, if the vehicle has mechanical problems, then purchasing a repo car can be a gamble.
Is it worth buying a repo car?
It may be worth buying a repo car if you are looking to purchase a later model vehicle that is not likely to have mechanical issues. However, if you are looking at an older model repo vehicle, then you will want to have some technical experience in understanding vehicles.
Why are cars repossessed?
Usually, a vehicle is repossessed if the buyer is unable to make payments on the vehicle. A vehicle can also be repossessed if the owner of the vehicle does not carry adequate insurance.
What does repo mean for cars?
Repo means that the vehicle has been repossessed or taken back by the seller. Once the vehicle has been repossessed, the vehicle is usually placed back for sale by the seller. Sometimes, the vehicle is placed at auction.
How fast can a car be repossessed?
A vehicle can be repossessed if the owner of the vehicle misses just one payment. The seller can repossess the vehicle without a court order or without notifying the owner of the vehicle. However, most sellers will wait until a buyer misses several payments before making a repossession.
Is the buyer responsible for the outstanding balance of the repo car?
No. If you buy a repo car and there is still a balance from the original sale of the vehicle, then the first seller is still responsible for the outstanding balance. You are only responsible for the purchase price of the vehicle.