By Josh RosenbergAre bank repossessed cars for sale at auctions really just the worst of the worst? Is it possible to find lower-mileage vehicles that are actually in good shape mechanically or are they all more likely to be just a few miles away from feeding "The Car Crusher"?
Well, the truth is there's really no short answer to these questions. The reason? There are both really nice repossessed vehicles in excellent condition ... as well as beat-up clunkers that look like someone had lived in them.
It's like most things in life. There's both the good and the bad. The fact is that many people won't even consider saving on a repo car because they have a preconceived notion that they all have been abused and are in bad condition.
However, I can tell you first-hand, this kind of thinking simply doesn't match up with the facts because, yes, large numbers of late-model cars also get repossessed and many end up at open-to-the-public repo auctions.
Sure, we used to quickly pass on 60% to 70% of the repos we saw. These are the older, higher-mileage and often neglected cars that most people think of when they think of repos.
Then there's the 20% or so that are just regular cars that really don't stand out one way or another ... average cars, average mileage, and average condition that could probably make decent enough choices.
But then there's the rest. These are the potential gems that really got our attention, and that we think many car shoppers are missing out on.
The Law Of Numbers
Unfortunate as it may be, it is simply in the law of numbers that a certain percentage of new car buyers or recent-model used car buyers will fall on unforeseen hard times and stop making their payments. While this is truly a sad situation, the fact is that these vehicles have to be resold and will make another car buyer very happy.
On two occasions, we actually purchased bank repossessed cars with less than 500 miles on them. We also were able to purchase many, many others with less than 5,000 miles. We've also missed out on many more because we were not the successful bidders. The point is, they're out there.
The problem may have been caused by a lost job. Perhaps a serious health issue arose. Or maybe a Dealership was too aggressive in their selling and never should have gotten a loan for a particular "at risk" buyer in the first place.
And all of these vehicles were under full Factory Warranty, had clean CarFax reports and were in excellent condition. And all of them were purchased at 40% to 60% below their original prices. So, yes, there are some great deals out there on these vehicles.
It Takes Patience And Good Shopping
But I don't want to make this sound easier than it is either. It takes some "shopping" and it takes some patience to get these good buys.
The reason for this is that not all repos are made available to the public. Those repoed by Dealerships, for example, are simply resold on the lot at normal prices.
The ones you're interested in are those that had been financed by local banks and credit unions. But not even all of these see the light of day for consumers. Many of these lenders don't want the hassle of reselling them and subcontract it out to independent companies, who then often sell them at the Dealer-Only auctions ... again, no access for public buyers.
Your best bet, of course, are those bank and credit union vehicles that are sold at public car auctions.
While anyone can attend these auctions, the fact is is that they can be hard to locate. However, there's a few things you can do to locate them.
Find Bank Repossessed Cars For Sale
You can call your local lending institutions to find the ones that resell to the public, especially the credit unions because they are more likely to do so. Also call any local newspapers to find out when they publish auction announcements. Yes, I know this isn't simple or fun, but it is doable.
Also, many small, local public auctions don't have much of a presence and there may be a lot of word of mouth involved. But with some careful web searching for your area (try - public car auction "your area or state") you should be able to track some down, or at least maybe some posts about them.
Also, SCA Auctions has public auctions all over the country, so try their listings.
And as times have changed, many auctions, especially the larger ones, are now online and fairly easy to find. I can give you a couple as a good start which have locations throughout the country. Try SalvageSellers (they actually auction the full range of condition vehicles, good and bad, not just salvage). You can also take a look at IAA.
Most of the online auctions are free to join and watch, but may have a fee to actually bid. In-person auctions are usually free to attend but this can vary. Also, not all of the vehicles can be bid on by anyone. Many can be restricted to "Dealer-Only".
You can also read more of what to expect here at Public Car Auctions.
Also be prepared to be patient. As they say, "good things don't come easy". There aren't tons of auctions all the time. It's not like going car shopping from Dealer to Dealer on a Saturday afternoon. These auctions can be a lot more spread out, both geographically and frequency-wise. But it is true that the savings are significant for those who shop these events.
The bottom line is that repossessed vehicles can't all be brushed with the same stroke. There's the good, the bad, and the ugly. And for car shoppers looking for a good buy on a late-model, low-mileage used vehicle, a repossessed car can be a very real option.
Good luck ... and happy car hunting! - Josh
Related Topics: Flipping Cars From Auctions and Car Auction Videos.