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USED CAR

How to Buy a Repo Vehicle

January 1, 2018 by admin 2 Comments

Should you consider a repo vehicle as your used vehicle?

The repo man just paid your neighbor a visit, hooking up his late model sport coupe to the tow truck and pulling away. Your neighbor tried to argue with the driver, but the driver ignored his pleas, shoving a document into his chest before driving off. Unless your neighbor resolves the problem his car will stay impounded until it is sold to a new buyer.

Tow Truck
(Public domain photo supplied by Jelson25.)

Repo Shopping

Your neighbor’s loss can become your gain, although you might not want to buy his vehicle back if you value his friendship. Instead, there are hundreds if not thousands of cars that enter the market each week, ranging from basic Kias to high-end BMWs.

There are a number of ways you can buy a repo including from a lender, a dealer or at auction. The downside is that you may not have the vehicle’s entire repair history to review, perhaps leaving you wondering if the owner let the car go because of unresolved maintenance issues or for some other problem. Also, cars that are repossessed generally are neglected as owners that can’t make loan payments usually won’t keep up with repairs.

Lender Repos

The company that financed the repossessed vehicle wants to sell it. And they want to stem their losses before they worsen.Clearly, lenders lose money when a car is repossessed. If the vehicle is new and in excellent condition, there may be several people interested in buying it. Lenders may accept bids for the car or set a fixed price and sell it to the first qualified buyer.

If you are interested in buying a repo vehicle, get your loan together first. Or, the lender may provide financing if your credit is very good. Perform due diligence by reviewing the car’s repair history and finding out from the lender why the car was repossessed.

Repo Dealers

Some car dealers specialize in buying repossessed cars from banks and auctions, making repairs and detailing them for resale. You will want to avoid any car that was salvaged, meaning that the vehicle was declared a total loss by the insurance company.

However, there are different kinds of damages that can give a car a “salvage title” including flood damage, hail damage and theft recovery notes Ronald Montoya writing for Edmunds.com. If you are handy with a car and you don’t mind the risk, then find out as much about the car’s history before moving forward.

Auction Houses

Many repo vehicles end up at public auction and are made available for sale to the highest bidder. However, these are also the cars that lenders and dealers may let pass by, meaning you need to be extra cautious before placing a bid.

First, check the vehicle identification number (VIN) to ensure that you have a match. If the car has been rebuilt, the VIN may not match. Move on if it doesn’t.

Second, look carefully at the car. Inspect the car inside and out, and crawl underneath to look for signs of water damage, frame repair and rust. Pull the dipsticks to verify that all fluids are clear. If something looks or smells odd there could be a larger problem lurking within.

Third, know the vehicles worth. If it is being sold “as is” then you know that there are problems present. Compare the auction house value with the Kelley Blue Book value. Set your top price and never get pulled into offering more for a car than what you’re willing to pay for it.

Your desire to find a repo vehicle bargain should never trump common sense. If you’re not particularly handy with car, this entire process should be left to those that are. Even weekend warriors know that a repo can require much TLC, with their time heavily invested in remaking a loser into a winner.


See Also — Used Car Shopping Caution: Odometer Fraud

Filed Under: Special Tagged With: CONSUMER ADVICE, KELLEY BLUE BOOK, repo car, repo man, TIPS, USED CAR

Used Cars: Where the Bargains Are

September 20, 2017 by admin 1 Comment

Bargains on used cars are available if you know where to look.

2015 Dodge Charger SE.
2015 Dodge Charger SE.

The average price of a new car is approximately $35,000 according to Kelley Blue Book, a price point that’s well beyond the reach of many car shoppers. One way to avoid that high cost is to settle for a lower-priced model, but that may mean making sacrifices on vehicle size, quality, and comfort. Another way to avoid the high cost of a new car is to buy used, particularly cars that are two to three years old, bargains that can be found by weighing the following several important considerations.

Consideration No. 1 — Initial Depreciation

The major drawback of buying any new car is that first-year depreciation can lop 20 to 30 percent off of its vehicle’s value. That means a $36,000 new car may be worth just $25,200 after the first year, a loss that the original owner must take.

That loss should be viewed as an opportunity for used car buyers. While most owners will hold on to their cars for a few years, cars that are leased are typically returned after just two or three years. Leased cars are sometimes resold at auction, but they’re also available for sale through new car dealers to help bolster inventories.

2017 Toyota Tacoma TRD Pro.
2017 Toyota Tacoma TRD Pro.

Consideration No. 2 — Larger or Less Popular

Depreciation for more popular models comes in lower than the industry average. That means if you are looking for a bargain, you should turn your eyes elsewhere.

Elsewhere includes models that consume more fuel such as big SUVs or ones that are simply not that popular including vehicles from discontinued brands or models.

Suzuki quit selling its vehicles in the United States in 2012. The company was never a big player on the market, but it did offer several smaller models such as the SX4 that were good on gas.

You can check the market value of any used car for free by visiting Kelley Blue Book. Suzuki may no longer sell its cars in America, but it still is available to service your vehicle and to handle warranty concerns.

2015 Chevrolet Colorado.
2015 Chevrolet Colorado.

Consideration No. 3 — Wear and Tear

If you find a used car that is still under the manufacturer’s new car warranty, then you have a bonus in your hands. However, you must ensure that the warranty transfers to you and at no cost.

Other warranties that may still be in effect include rust and powertrain, the latter sometimes good for up to 100,000 miles. If you are shopping for a used hybrid vehicle, the typical warranty is for eight years or 100,000 miles on your hybrid battery system.

One model, the Hyundai Sonata Hybrid, offers a lifetime warranty, but it is not transferable to a new owner. Regardless of warranty considerations, there is a mileage point where buying a used vehicle makes sense. That point is before major repairs or expensive maintenance takes place.

Used cars that have under 50,000 miles on the odometer and have been well maintained, should go another 50,000 miles before more expensive maintenance and repairs become a factor. Still, tires are generally replaced by 50,000 miles and brakes, oil, air filters, batteries, and fluids will have been serviced or replaced. Costlier repairs such as water pumps, hoses, belts, mufflers, suspension system parts and electronic sensors can happen at any time.

Major work such as engine repair, transmission replacement or body work can usually be avoided if a car has been properly maintained. Ask the owner for car maintenance records and obtain a vehicle history report.

2015 Infiniti QX70.
2015 Infiniti QX70.

Consideration No. 4 — Consider the Seller Pool

You can find a bargain on a used car by careful shopping. Know that if you choose to buy from a dealer, you will pay the customary mark up to cover the dealer’s expenses and profits. However, you may also receive a limited warranty, something that a private seller may not be able to offer.

New car dealers stock their inventories with newer used cars to supplement their new car inventories. Used car dealers may feature newer cars to much older models. Either way, you will face the dealer’s mark up.

You can also consider a car from a rental car company. Enterprise, Hertz, and Budget are among the companies that sell off their fleets to private buyers, cars that typically have 12,000 to 50,000 miles on the odometer. You will find, however, that there is little room to negotiate on price. What you will receive is a vehicle that has been well maintained. Thus, your bargain may not be on price, but on care.

The best bargains on used cars are typically through private party sellers. These individuals are simply seeking to sell a car they no longer want or need and will price their cars accordingly. You can verify what any vehicle should fetch by checking its private party value through Kelley Blue Book or NADAGuides.com.

2016 Ford Mustang GT Convertible.
2016 Ford Mustang GT Convertible.

Used Cars: The Art of Negotiation

Your best deal on any used car can be had by negotiating the vehicle’s price. With the information you have on hand about its value, you have a good starting point for your negotiation.

Present your best offer, await the seller’s counter offer, then find a middle ground that will satisfy both parties.


See Also — 8 Steps to Buying a Used Car

Photos copyrights Auto Trends Magazine. All rights reserved.

Filed Under: Car Tips Tagged With: CHEVROLET COLORADO, Dodge Charger, Ford Mustang GT Convertible, INFINITI QX70, KBB, KELLEY BLUE BOOK, NADAGUIDES.COM, SUZUKI, Toyota Tacoma TRD Pro, USED CAR

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