Wouldn’t it be great to enjoy Florida weather with a good-looking vehicle, say, an Audi or a BMW? These brands are luxury, and thus, they are very expensive. Your next best option is to buy used ones.
Although you can always head to your closest dealership, you may also want to consider getting repossessed cars and enjoy better bargains.
But what is repossession?
Unless a person has the means to purchase a vehicle in cash, most likely he’s going to secure an auto financing or a loan, preferably from a bank. This loan consists of the closing fees, interest (profit of the lender), and principal (the actual amount you wish to borrow). The closing fees are usually settled before you can officially take out the loan. The other two, meanwhile, need to be repaid over a period of several months or years.
As a debt, the person is expected to make repayments every month until the entire loan is paid. However, due to some reason, he incurs a default or missed repayments. Not all lenders are heartless: they can give clients grace period with probably a penalty for the missed repayment. But if he keeps on making defaults, the bank may take an action against the property or the car.
They repossess it. You see, as part of your loan contract, you agree that if you can’t meet your loan obligations, the lender has the option to get the vehicle from you. They will secure a court order to finalize the repossession.
However, lenders are not in the business of selling vehicles. They have to dispose these assets so they can recover their losses because of the defaults, and usually they turn to auctions to help them out.
Why an Auction?
- Lenders can sell many of their vehicles at a single time. A Florida car auction can have as many as hundreds that have to be sold in a matter of only a few hours.
- The activity attracts many potential bidders, including dealers.
- They can dispose their assets very quickly. It’s expected that right after the auction, all the necessary paperwork signed by the new buyer will be signed and the deal closed.
How Auctions Are Good for You
- You can get great repossessed vehicles for a fraction of a price. While the lender also hopes to earn more from every car up for bidding, their main objective is recovery. Thus, they are more than willing to drive down the market price of the vehicle to attract several bidders and sell the vehicles fast.
- You can see many different types of vehicles. Car auctions can carry a wide range of cars, from sedans to SUVs. Sometimes you get to check out trucks, boats, and motorcycles. More options mean better chance of getting a car that you’ve always liked.
- You can skip the dealers. After all, many dealers also go to auctions to increase their inventory.
- You can still secure auto financing. Just because you’re buying the car at an auction doesn’t have to mean you are no longer qualified for a financing. In fact, you may be pre-approved faster since you may not have to borrow a huge amount.