While you may not believe this, government car auctions do support the auto industry. Why is that you may ask? It is very simple to explain. Remember, the more autos that are sold through these auctions the more that they are out in the public eye developing interest in other types of autos that a carmaker may have to offer. Furthermore, the quicker the Government can clear this surplus car stock, the quicker it can replace them with a new fleet of vehicles.
With a wide variety of cars to choose from and some of these cars seized in repossession, it does benefit the car industry. They are being paid back a debt that is owed. This helps them by recovering a debt and part of the money that is owed to them by the debtor. Once the car is auctioned off, then the recovered money will be sent to the finance company that had the loan on the repossessed car. There are many people in today’s economy that are defaulting on auto loans and having cars and trucks repossessed. They are then sold to the highest bidder at auction and the money recouped goes back to the lender. This helps the lender both stay in business and remain solvent so that they can continue to finance other car purchases. The buyer also wins with having a quality automobile that they can bid on and win.
So this is a twofold process. The auction gets the money back that the lender needs or as much of it as can be raised during an auction. The party that was repossessed will be responsible for the balance due, if the car sells for less than the loan value. So that is also valuable to helping the auto industry. While it is bad that many people are either losing their cars to repossession or being seized as part of a raid, either way it benefits the auto industry.
Either by seizure or repossession, this will benefit the auto industry in one way. They will get paid what is owed to them without too much fuss after the cars are auctioned off. That is the reason why cars are auctioned off in many different auctions. The automakers recover their costs and the loans are repaid as much as possible. Defaulting on loans or cars being seized with loans still outstanding are checked in the database and then sold with the proceeds going back to the loan makers.
