Repossessed Cars: A Guide On How to Properly Buy Them

how to buy repossessed cars

Thinking about buying a car without spending too much? Repossessed cars might be a good choice. But how do you do it? In this guide, we’ll explain how to buy repossessed cars from banks.

Is it possible to buy repossessed cars?

Yep, you can get repossessed cars. When people can’t pay back their car loans, the bank or credit union can take the car back. Then, they sell these cars to make up for the money they lost.

Where can you buy repossessed vehicles?

Repossessed cars are sold in different ways:

  1. Banks and credit unions: Many banks and credit unions sell repossessed cars directly to people. You can find these cars on their websites or in local newspapers.
  2. Auctions: Repossessed cars often go to auctions, where people bid on them. Banks or other companies might conduct these auctions.
  3. Repo Companies: Some lenders work with special companies to sell repossessed cars. These companies fix up the cars before selling them.
  4. Used Car Dealerships: Sometimes, repossessed cars end up at used car dealerships. Dealers can buy them at auctions or from lenders directly.

Is it better to buy from banks?

Buying repossessed cars directly from banks and credit unions has its perks:

  • Clarity: Banks usually give detailed information about the repossessed cars they’re selling, so buyers know what they’re getting.
  • Savings: Banks aren’t experts at selling cars, so they might offer them at lower prices to sell them quickly.
  • Payment Help: Banks often provide payment plans to help buyers afford repossessed cars.

But there are downsides too:

  • Limited Choices: Banks might not have as many repossessed cars as auctions or other sellers.
  • No Guarantees: Repossessed cars from banks are often sold without any warranties, so buyers have to handle any fixes.
  • Bidding Stress: Sometimes, buyers have to bid against others to get the car they want from a bank, which can be tricky.

The advantages and disadvantages of repossessed cars

Here’s a breakdown of the good and not-so-good aspects of buying repossessed cars:


  • Money-Saving: Repossessed cars often cost less than usual, giving buyers a chance to save some cash.
  • Variety: You’ll find all kinds of repossessed cars, from affordable ones to fancy models, so there’s something for everyone.
  • Bargaining Room: Sometimes, you can talk down the price of a repossessed car, especially if it’s been for sale for a while.


  • Mystery History: Repossessed cars might have had problems in the past, like accidents or mechanical issues, which you might not know about.
  • No Guarantees: Most repossessed cars come with no warranties, meaning you’re on your own if anything goes wrong after you buy one.
  • Repair Costs: You might have to spend extra money fixing up a repossessed car, especially if it needs a lot of work.
  • Tough Competition: In auctions, lots of people might be bidding for the same car, making it harder to get a good deal.

Tips for buying repo cars from banks

Here are some easy steps to follow when buying repossessed cars from banks:

  1. Do Your Homework: Spend some time researching similar cars’ prices to know if you’re getting a fair deal. Look online, check car valuation websites, and see what’s happening in your local market.
  2. Check the car thoroughly. If you can, give the car a good once-over before buying it. Look at the inside, the outside, and how it runs. Watch out for any damage or problems that could cause issues later. It might be worth getting a professional mechanic to take a look at it too.
  3. Stick to Your Budget: Decide how much you can spend before you start looking. Remember to include any extra costs like repairs, registration, and taxes. Sticking to your budget will help you avoid spending more than you should.
  4. Understand the Rules: Make sure you understand all the terms and conditions of the sale set by the bank. Check for any fees or charges you might need to pay. If anything’s unclear, ask questions to get it sorted out.
  5. Look at Financing Options: See what kind of financing the bank offers. Compare things like interest rates and repayment plans to find the best option for you. It’s a good idea to get pre-approved for a loan to make the buying process smoother.
  6. Be patient. Finding the right repossessed car might take time, so don’t rush. Keep an eye out for good deals, and be patient. Waiting for the perfect car at the right price will pay off in the end.

Other considerations when buying repo cars

Here are some additional things to think about when buying repo cars:

1. Vehicle History Report

Check if the repo car comes with a detailed history report. If not, consider getting one from trusted sources like Carfax or AutoCheck. This report can tell you about past accidents, repairs, and maintenance, helping you make an informed decision.

2. Mechanical Evaluation

Besides looking at the car, it’s smart to have a mechanic check it out thoroughly. They can spot hidden issues that you might miss, which can affect the car’s condition and repair costs.

3. Title Verification

Make sure the car’s title is clear of any liens or problems. Get a copy of the title and review it carefully to confirm ownership and a clean title. Address any issues before buying to avoid legal problems later on.

4. Return Policy

Ask about the bank’s return policy or warranty options. While many repo sales are final, some banks might offer limited warranties or return periods for peace of mind. Knowing your options can help if you’re not satisfied or run into unexpected problems.

5. Vehicle Usage

Think about how you’ll use the car. Consider factors like mileage, fuel efficiency, and if it suits your needs. Whether it’s for daily commuting, family trips, or fun adventures, pick a repo car that fits your lifestyle.

6. Negotiation Strategies

Even though banks often price repo cars competitively, you might still be able to negotiate, especially for cars that have been unsold for a while. Do your research, point out any issues, and make a reasonable offer based on market value and condition.

7. Future Resale Value

Check the car’s resale value before buying. Think about how much it might depreciate, the demand for its make and model, and future maintenance costs. Choosing a car with a good resale value can save you money in the long run.

8. Insurance costs

Consider the insurance costs for the repo car, including premiums, deductibles, and coverage. Get quotes from different providers based on the car’s details. Pick an insurance policy that gives you enough coverage without breaking the bank. 

Learn the right way to buy repo cars

Buying a used car can save you money, but it’s important to be careful. Use these tips and know the pros and cons of repo cars to make a smart choice that fits your needs and budget.

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