Repossessed vehicles can be an excellent option for those looking to save money on a car, truck, or SUV.
These vehicles are reclaimed by lenders when the previous owner fails to meet loan obligations and are often sold at a fraction of their market value. However, there are important factors to consider before making a purchase. Here’s a guide to where you can find repossessed vehicles and how to make an informed buying decision.
There are several places to buy repossessed vehicles, including direct sales from financial institutions, auctions, and specialized dealerships.
Many financial institutions sell repossessed vehicles directly to the public to recoup their losses. You can often find these sales listed on the bank or credit union's website. This can be a straightforward way to buy, but inventory is often limited.
Auctions are the most common place to find repossessed vehicles. Global online platforms like Copart and IAA auction thousands of vehicles weekly, including repossessions. However, these sites are also known for selling salvage title vehicles, which have been declared a total loss by an insurance company. Repossessed cars can have clean titles, so it's critical to verify the title status before bidding. Some public auctions may not require a special dealer's license to participate.
Websites like GovDeals auction surplus government vehicles and other property. These auctions are open to the public and feature a wide variety of vehicles from government agencies.
In addition to direct auction sites, other platforms like RideSafely and Repocast specialize in repossessed vehicle auctions, offering access to inventory from banks and financial institutions nationwide.
While buying a repossessed vehicle can save you money, it’s essential to take certain precautions.
Repossessed vehicles are almost always sold "as-is," meaning you are responsible for any repairs. A previous owner who couldn't make payments may have also neglected maintenance. Whenever possible, hire a mechanic to conduct a pre-purchase inspection. If an inspection isn't allowed, you must be comfortable assessing the vehicle's condition yourself.
Always obtain a vehicle history report from a service like Carfax or AutoCheck. This report provides details on past accidents, title status (confirming it's not a "salvage" or "rebuilt" title), mileage records, and sometimes service history.
Research the vehicle's market value using online guides like Kelley Blue Book or J.D. Power (formerly NADA Guides). Compare the asking price to the market value, and factor in potential repair costs to determine if you are getting a good deal.
If buying from an auction, be aware of all rules and fees. Most auctions charge a "buyer's premium," which is a percentage of the final bid price that is paid to the auction house. This and other fees can significantly increase the total cost of the vehicle.
Auction sales typically require immediate payment in full. If you need a loan, it's best to get pre-approved from your bank or credit union before you start bidding.
Ensure the vehicle comes with a clean title that is free of any liens. A lien is a legal claim on the property that must be cleared before the vehicle can be legally registered in your name. Reputable sellers should provide a clear title.