I’m getting a little frustrated with a lot of misinformation on the internet aimed at car buyers looking for “repo cars for sale”. Most of this information is aimed at pushing people to car auction websites. Car auction sites are fine and you can even find repossessed cars through them, but let’s set the record straight on what really happens to a majority of repoed cars.
True, while some repos do end up at public auctions, thereby becoming very good potential buys for consumers, most will never make it to these auctions and will instead eventually be sold to a new owner at regular retail prices.
The reason for this can be traced to the original lien holder. If a repossessed vehicle was financed through a Dealership via their own in-house financing, the car is going to end up back at the Dealership. Then, one of two things will happen.
Either the Dealer will shine-up the vehicle and resell it on the lot, or the Dealer will take it to a Dealer-Only auction and sell it to another Dealer. These vehicles will not see the light of day at a public car auction. And this is what happens to most repossessed vehicles since they were financed at a Dealership.
What about those that had been independently financed by a local bank or credit union? Well, these are the best bets for car buyers looking for a good deal. But even with these, most still end up in the hands of a Dealer and are again resold at retail prices.
Why? Well, banks and credit unions aren’t in the car selling business and these vehicles are a real nuisance for them. While some of these lenders may have “repo sales” from time to time, most elect to at least partially solve their problem quickly by selling their repos to outside companies or local Dealers.
If the vehicle goes to a local Dealer, it will again end up on their lot or at a Dealer-Only auction … and again away from the possible cheap purchase by a consumer.
If it goes to an outside company, some go to Dealer auctions and some (finally) go to public auctions.
You can try calling your local lenders to see what they do with their repos. As noted earlier, some do have their own sales periodically, although they are a minority.
So, yes, you can find some nice repossessed vehicles at local public auctions. However, it will likely take some consistent shopping as well as some patience. The good deals are out there for the public. They’re just not as plentiful as some on the internet would have us believe.
