While buying a brand-new SUV can be exciting, not everyone may be able to afford it. But that does not mean one has to drop the plan. Those who have a limited budget but still need an SUV can look for ways to save on their purchase. One solution is to bring home a repossessed SUV. Although such SUVs may be easily available, one should do their research before making a purchase decision.
Understanding repossession
When someone buys an SUV on a loan, they must repay the lender within a fixed period. If they default on the loan, even after being given ample notice to make missed payments, the lender can repossess the vehicle. One can then sell the SUV at auctions to try and recoup the remaining loan balance or the vehicle’s value.
Tips for finding repossessed SUVs for sale
1. Look for bank announcements
Banks and credit unions sometimes sell repossessed cars directly to the public. While doing so, they might put up a notice on their website, in local newspapers, or on other credible third-party websites. In the notice, the institution typically lists the available SUVs and shares basic details, such as their make, year, and mileage. Banks and credit unions may also offer financing options to complete the deal sooner. There may also be some room for negotiation in the loan terms here.
Generally, bank-repossessed SUVs are sold in “as is” condition without warranties. So, any cosmetic or mechanical repairs are left to the buyer. Also, one cannot inspect the car before placing a bid. The bank might let the individual see the vehicle only after their bid is accepted and before signing the purchase paperwork.
2. Look for auctions
Most repossessed SUVs are sold at auctions, especially if they are damaged or neglected, and the lender does not want to bear the cost of repairs before reselling them. An auction may have several SUVs for sale, meaning one would have many options.
Repossessed or used-vehicle auctions can be held on-site or online. In an on-site auction, one can see the vehicle before bidding and at least know whether it has been cleaned up and repaired cosmetically. But the drawback is that one does not get financing options, so they would need to carry cash or a letter of pre-approval for a loan. On the other hand, in an online auction, one cannot assess the vehicle’s condition while placing a bid, but they may be able to apply for financing if they have good credit.
3. Look up repo companies
Sometimes, a lender might ask a repo company to do the hard work of finding a buyer for the used SUV. The auction process is typically similar, with online descriptions and a blind bid process. That said, the repo company may charge the lender fees for storing and preparing pre-owned SUVs for sale.
4. Contact used car dealerships
Several repo SUVs, including those sold at an auction, may end up at used car dealerships. The dealership may buy these vehicles from the auction, clean them, and carry out necessary repairs, making them indistinguishable from the other pre-owned vehicles in the lot. The quoted sales price may also be higher since the dealership needs to recover costs. Even then, some dealers offer in-house financing, handle the paperwork, and even quote a price for a partial warranty. They may even be willing to negotiate the price for a pre-owned SUV on sale.
Tips for buying a repossessed SUV
To choose and buy the right repossessed SUV, one should research the vehicle and consider certain important factors beforehand.
1. Set a budget
The first step in buying a repossessed SUV is setting a budget. While a repossessed vehicle might be priced lower than a new one, it can still be expensive for one. So, it is important to identify the models that fit the budget and avoid overpaying.
2. Check the car’s condition
A careful inspection is necessary since a repossessed car might be neglected or poorly maintained. It can help identify potential issues or hidden damages that may have to be addressed later. A few components to check include the body, engine, and interior.
3. Look for financing options
Some lenders who auction repossessed SUVs offer auto repo loans, which can help finance the vehicle. To simplify the purchase process, one could also look for pre-approved loans from third-party lenders. Regardless of the financing option chosen, one should negotiate the interest rate, as it may help reduce the overall cost. Also, researching and comparing financing options can help buyers get the best deal and save money.
After buying a repossessed SUV, one may need to maintain it well, especially if the previous owner has not looked after the vehicle. Additionally, one would have to stay up-to-date with maintenance, follow the manufacturer’s recommended upkeep schedule, and visit the garage for routine checks and repairs. All of this will help maintain the SUV’s value and steer clear of any potential issues.
