A bank-owned car can be a great deal – or a total nightmare. As with other purchases, it’s important to do your research and be a smart shopper. When you’re careful about your purchase, you can take home a safe, reliable car for a fraction of the cost. And, banks have more than just cars. Many people turn to bank-owned inventory when buying pickup trucks, boats, ATVs, RVs and small aircraft.
Below you’ll find the pros and cons to buying bank-owned vehicles, and then you can decide if this route is right for you.
Pros of Buying Repossessed Vehicles
When the owner of a vehicle doesn’t make their loan payments, their vehicle can be taken away by the bank. Usually this happens after a few months of defaulted payments, but it can happen even sooner than that. Some people assume that repos are always old, beat up cars that no one wants, but it’s often the new cars that people can’t afford.
Here are the pros to buying bank-owned vehicles:
- Get a great deal on a decent vehicle. Banks and lenders want a quick sale to reduce their loan loss, which is why they price their inventory low and are willing to negotiate.
- Shop a wide selection. Cars and trucks are taken away all the time from their owners. Banks end up selling them to dealerships, the general public or auction sites, leaving you to shop an impressive selection of cars, trucks, SUVs and more.
- Fast turnaround. While you do need to be patient when shopping for repos, the process usually moves quickly when you find something you like. Banks and lenders want these vehicles off their lots as soon as possible.
Cons of Buying Bank-Owned Cars
There are some disadvantages to buying repossessed vehicles, which is why they aren’t for everyone. Here are some cons to be aware of.
- Lack of test drives. It’s possible that you won’t be able to test drive the car before you buy it. This can be a problem if there are hidden issues. To offset this risk, be sure to look at the vehicle’s pictures, get a condition report and schedule an inspection.
- As-is purchase. If you buy a repo and decide you don’t like it, you can’t bring it back. You’re stuck with it because all repos are “as-is” purchases. That said, some vehicles still carry their original warranty, which is passed down to the new owner.
- Unclear background. Banks usually send out a third-party to repo vehicles, so you probably won’t know a lot about its background. The good news is that you can find most of this information online, as auction centers must disclose this information to the buyers.
As you can see, there are clear pros and cons to buying bank-owned cars, trucks and RVs. RepoFinder.com has a vast selection of vehicles that are in good condition and have low mileage. Take a look and see what types of vehicles you can find in your price range – it’s free!