If you’re in the market for a car but don’t want to pay sticker or even pre-owned prices, repossessed car auctions may be your best bet. That is, if you know what you’re getting yourself into.
Repo auctions sound sketchy, offering up to 95% off all makes and models. But you can actually get a great deal if you’re prepared. Usually, the government or a bank has seized the vehicles for whatever reason and are looking to unload them fast, at deep discounts.
Most auctions list their inventory ahead of time, so you can browse what’s being sold and even check under the hood. If you have this opportunity, make sure to check everything from the paint job to the brake pads and, most important of all, the VIN (vehicle identification number).
The VIN is crucial because the cars at auction are being sold as is, meaning the sellers – bank or government – are not responsible for problems that arise down the road. You can enter the VIN at sites like CARFAX.com to find the car’s accident and repair history before you bid (in fact, you should be doing this if you buy a used or pre-owned car as well).
The fast-paced atmosphere of repo auctions can be overwhelming for first-time buyers - after all, you’re competing with the pros – so consider staking one or two out before jumping in. When you’re ready to bid, know exactly what you’re willing to spend. If you get caught in a bidding war, you run the risk of making the rookie mistake of coughing up much more than the vehicle is worth. Also, remember that the final bidding price is not what you’ll pay – assume the seller will tack on a 5-10% premium to your bid.
Finally, when you go to an auction, make sure to bring cash and lots of it. Most demand you pay on the spot and don’t accept plastic.