Some people attempt to buy repossessed cars from banks because such vehicles often sell for less than the market value. Banks and credit unions do not like to keep repossessed vehicles on the books for very long because vehicles are depreciating assets. Additionally, financial institutions have to pay taxes and insurance for repossessed vehicles, so most banks and credit unions are eager to sell them quickly.
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Look in your local newspaper for the classified section. Financial institutions often place advertisements for repossessed cars in the auto classifieds section. Take down the details of any vehicles that interest you. Generally, newspaper advertisements for repossessed cars contain minimal information, but you should find at least the year, make and model listed to get you an idea of what's available.
Go online to the websites of banks and credit unions in your area. Perform searches for repossessed cars. Some banks do not list cars on the actual websites but provide contact information for people inquiring about inventory. Write down the details of cars listed or call the bank hotline and ask a representative about the repossessed vehicles they have on the books.
Contact local car dealerships. Many larger banks contract with car dealerships to sell repossessed cars on an individual basis or at auctions. Ask local car dealers about bank and credit union repossessions and take down the details of any cars that interest you.
Go to your local bank or credit union and apply for a vehicle loan. Provide the banker with your two most recent payslips or two years of tax returns if you are self-employed. Tell the banker about the vehicles that interest you. Most banks lend money on cars that are less than seven years old. Banks use the Kelley Blue Book to price vehicles. The banker pulls your credit score to preapprove you and tell you how much you can borrow.
Contact the bank, credit union or dealer holding the repossessed vehicle that interests you. Ask to inspect the vehicle and request a carfax report. The report allows you to learn about the history of the car. If you like the condition of the car, make a bid. You should offer less than the Kelley Blue Book value and provide the seller with a copy of your car loan pre-approval letter. Agree upon a price and ask the seller to give you a bill of sale. You take the bill of sale back to your lender and you receive a cashier's check payable to the seller. You exchange the check for the car keys and title.
Tips and warnings
- Some banks offer in-house financing to expedite the sale of repossessed cars, but you might get a lower interest rate at your own bank. Generally, credit unions offer the best interest rates on cars because they are non-profit organisations.
- People should think carefully before buying cars at auctions. Most auction buyers do not get a chance to test drive vehicles and do not have access to vehicle history reports before bidding. Generally, car sales are final so you cannot return the car if problems later emerge.
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