More people are turning to used car auctions in order to find a high quality luxury cars at lower than retail prices. Repossession auctions typically offer the best option to get luxury or late-model cars. This is because most vehicles are repossessed within the first few years of their initial purchase. The most important thing to keep in mind when attending auctions is that not all cars are created equal. The key to spotting a good repossessed used car is preparation and knowing what to look for.
There is No Reason for a Bank to Not Have the Title
The first thing to keep in mind is that there is no reason for the lending institution to not have the title for the vehicle. In most cases, when a bank or credit union gives a loan to an individual for a vehicle they will retain possession of the title. It is important to keep in mind that just because the title is not present at the auction doesn’t mean the bank does not have the title at all. If the lending institution submits their vehicles to an auction they are not required to provide the title immediately, although many of them do to save time. If the vehicle does not have the title at the time of the auction it will be listed as “title in transit”. This means the bank does have the title however it is not available for pickup at the time of the auction. If you purchase a vehicle with a title in transit it will normally be delivered within 30 days. While this means you may not be able to title and register the vehicle immediately after you buy it, there is little reason to worry. Plus, many auction houses will give you the opportunity to request a refund if the title is not provided to you within a timely fashion.
A Growing Number of Auctions Designate Repossessed Cars on the Bid Listings
It is important to keep in mind that while there are auctions which solely consist of repossessed cars, many lending institutions will add repossessed cars to general public auction listings. When this happens it can be difficult to tell apart repossessed cars from the rest. To make things easier many auction houses are now adding a description of the source to the auction listing. Normally cars submitted by lending institutions receive the simple designation of repossessed or repossession vehicle. This will make it easy to tell repossessed cars apart from the rest. If the auction listing does not do this then it can be more difficult to determine where the car is actually sourced from.
Look for Minimal Damage on the Front and Rear Portions of the Vehicle
Contrary to popular opinion most repossessions take place in an extremely civil manner. Some people even bring their car to the lending institution so the towing company doesn’t have to pick it up. At the same time, a repossession that goes poorly can lead to the vehicle being damaged. Inexperienced or low quality towing companies can also cause damage to vehicles during the repossession process. In order to identify this type of damage look for vertical scrapes and dents to the front and rear portions of the vehicle. This can be caused by inappropriately securing the vehicle during transport. While this isn’t inherently a cause for concern, it could mean there was accidental damage to the frame or axle.
Check the Gaps or Lines on the Hood, Trunk, and Doors
In some cases, people do not pay off their vehicle loans because the vehicle suffered some sort of damage. As a result, the owner simply doesn’t want to pay for it anymore and they will give it back to the lending institution. The easiest way to see if there was significant damage is to check the gaps or lines between panels on the hood, trunk, and doors. If there is no damage then the gaps or lines will be equidistant on both sides.
Repossessed Luxury Cars and Late-Model Cars Are Often the Safest Bet
At most repossession auctions luxury cars and late-model vehicles are often the safest bet. Many people purchase luxury cars when they get a promotion at their job or suddenly come into money. Unfortunately, if there is a change in their economic status they will often get rid of their luxury car and switch to something more affordable. In most cases, they will have taken good care of their luxury car before it was repossessed which minimizes the risk of reliability issues. Late-model vehicles are safe bets for the same reason.
Used Car Dealers Typically Set the Market at Any Given Auction
One fact to keep in mind that repossession auctions is used car dealerships typically set the market at any given auction. Used-car dealers are looking to make anywhere from 20 percent to 50 percent off of every vehicle they purchase at auction. This means most people who get great deals at repossession auctions are simply bidding a few hundred dollars higher than the used car dealers are willing to go. While this means you likely won’t get a late-model luxury vehicle for a few hundred bucks, it does mean you will still pay well below market value.
Examples of Great Deals on Quality Repossessed Cars
2008 Toyota Scion TC
This 2008 Toyota Scion TC was repossessed in Florida and came with a clean title. It has minimal side damage which appeared to be normal wear and tear. The Scion had less than 85,000 miles on it. It was a white 2 door hatchback with a 2.4 liter inline 4 engine. The estimated retail value of the car was more than $10,000. The winning bidder paid only $3,500. While it was sold “as-is, where-is” the auction house conducted a run & drive verification, provided the name of the financial institution involved, and of course published the VIN number in the listing so bidders go do their due diligence before the auction began.
2011 Toyota Sienna
This red 2011 Toyota Sienna is a great example of how you can save money on a late-model repossessed vehicle. There was less than 6,000 miles on it and it came with a clean title. There were minor scratches on the exterior, but the estimated repair costs were only $150. It had a 3.5 liter V6 engine and was front-wheel drive. While it has an estimated resell value of nearly $24,000 the winning bidder paid only $13,500.
2013 Infinity FX37
A great example of landing a nearly new car at a repossessed vehicle auction is this 2013 Infiniti FX 37. It had less than 3,000 miles on it. There was no damage aside from normal wear and tear. It was a grey, all-wheel, 4 door SUV with a 3.7 liter V6 engine. The winning bidder paid only $35,000 even though the estimate value was closer to $52,000 miles. With only 3,000 miles on it, there was no need for the winning bidder to worry about the maintenance history. Plus, it came with a clean title from Pennsylvania.
2005 Audi A8
The final example of great deals on quality repossessed vehicles is this 2005 Audi A8. It was a silver, 4 door sedan with a 4.2 liter V8 engine. It had all-wheel drive and only minor dents and scratches. It came with a clean title but did have 120,000 miles on it. The winning bidder paid only $3,500 for it even though it had an estimated local market value of nearly $12,000.