How to Find and Buy Repossessed Cars Near You

Repossessed cars, often referred to as repo cars, can be an attractive option for individuals looking to buy a used vehicle at a discounted price. These vehicles are typically sold by financial institutions, such as banks or credit unions, after the original owners have defaulted on their loans. While repo cars can offer significant savings, finding and buying them often involves careful research, due diligence, and an understanding of the process. In this basic guide, we’ll walk you through the steps to help you find and buy repossessed cars near you.

Understand the Repossession Process

Before you start searching for repossessed cars, it’s helpful to understand the repossession process. When individuals finance a vehicle through a loan, the lender holds a lien on the car, which gives them the legal right to repossess it if the borrower fails to make payments. Repossession typically occurs after several missed payments, but the exact timeline can vary by state and lender.

Once repossessed, these cars are usually sold by the lender to recoup the outstanding loan balance. Because the goal is to sell these vehicles quickly, they may be priced lower than their market value, making them an appealing option for budget-conscious buyers.

Determine Your Budget and Needs

Before you start your search, establish a clear budget for purchasing a repossessed car. Consider not only the purchase price but also ongoing costs such as insurance, maintenance, and potential repairs. Repossessed cars may require some work, so factor in any additional expenses for repairs or upgrades.

Additionally, define your specific needs and preferences for the type of vehicle you’re looking for. Consider factors like the make and model, age, mileage, and any features or specifications you require. Having a clear understanding of your budget and needs can help you narrow down your options and make informed decisions.

Find Local Auctions

One of the primary ways to buy repossessed cars is through auctions. Here’s how to find local auctions:

• Online Auction Websites: Many auction houses and organizations now conduct auctions online, allowing you to participate from the comfort of your home. Websites like AuctionZip and Repo.com list various types of auctions, including those for repossessed cars.
• Local Auction Houses: Look for local auction houses that specialize in selling repossessed vehicles. Contact them to inquire about upcoming auctions, their registration process, and any fees involved.
• Government Auctions: Government agencies, including local law enforcement agencies and federal departments, often hold auctions for seized or forfeited vehicles. Check with your local government for information on these auctions.
• Bank and Credit Union Auctions: Financial institutions that repossess vehicles often hold auctions to sell them. Contact banks and credit unions in your area to inquire about upcoming auctions.
• Auto Auction Companies: Some companies specialize in conducting auto auctions, which may include repossessed vehicles. 

Research the Vehicles

Once you’ve identified potential auctions, research the vehicles that will be available. You can often find information such as vehicle descriptions, VINs, and photos on the auction websites. It’s helpful to thoroughly research each vehicle to assess its condition and value. Here are some key steps:

• Vehicle History Report: Obtain a vehicle history report using the VIN. This report can provide valuable information about the car’s ownership history, accidents, title status, and more.
• Inspect the Vehicles: Whenever possible, attend the auction preview or inspection day to physically examine the vehicles you’re interested in. Look for signs of wear and damage, and consider bringing a mechanic with you for a professional inspection.
• Set a Maximum Bid: Determine the maximum bid you’re willing to offer for each vehicle. It can be easy to get caught up in the excitement of an auction, and having a predetermined limit can help you avoid overbidding.

Register for the Auction

To participate in an auction, you may need to register as a bidder. The process may vary based on the auction company you’re buying from, but it generally looks like this:

• Complete Registration Forms: Fill out the required registration forms provided by the auction house or website. You may need to provide personal information and agree to the auction terms and conditions.
• Verify Identification: Bring a valid government-issued ID or driver’s license to verify your identity.
• Pay Any Registration Fees: Some auction companies may charge a registration fee, which can vary depending on the auction house or website. Be prepared to pay this fee if applicable.
• Receive a Bidder Number: After completing the registration process, you’ll receive a bidder number or login credentials for online auctions. This number or login identifies you during the bidding process.

Attend the Auction or Bid Online

Depending on the auction format, you may be able to attend in person or bid online. Here’s a basic idea of what to expect for each option:

• In-Person Auction: If you’re attending an in-person auction, arrive early to familiarize yourself with the environment and the auctioneer’s procedures. Pay attention to the bidding process and wait for your desired vehicles to come up for auction. When your chosen vehicle is on the block, raise your bidder number or signal to place your bid.
• Online Auction: For online auctions, log in to the auction website at the specified date and time. Monitor the bidding progress for the vehicles you’re interested in, and place your bids accordingly. Be mindful of the auction’s closing time, and bid before it ends.
• Proxy Bidding: Some online auctions offer proxy bidding, allowing you to set your maximum bid in advance. The system will automatically increase your bid incrementally to maintain your lead until your maximum bid is reached or exceeded.

Winning the Auction

If your bid is successful and you win the auction, congratulations! Below are some of the steps you can expect to take following your win.

• Payment: Follow the auction’s payment instructions, which may involve paying a deposit or the full amount for the vehicle. Payment methods typically include cash, cashier’s checks, credit cards, or wire transfers.
• Obtain the Title: Once you’ve paid for the vehicle, you’ll need to obtain the title. The auction house or seller should provide the necessary documentation to transfer the title to your name. Ensure that you complete this process correctly, as it varies by state.
• Arrange Transportation: Make arrangements to transport the vehicle to your desired location. You may need to pick it up from the auction site, so be prepared with the necessary transportation or towing services.
• Insurance: Don’t forget to arrange insurance coverage for your newly acquired vehicle before driving it.
• Additional Fees: Be aware of any additional fees, such as auction fees, taxes, and registration fees, which may apply to your purchase.

Buying repossessed cars can be an excellent way to save money on a used vehicle, but it requires careful research, preparation, and due diligence. By understanding the repossession process, determining your budget and needs, finding local auctions, and researching the vehicles, you can navigate the process with more ease.

Resource Links

Debt.org: Car Repossession

Capital One: How to Buy Repo Cars and What to Consider