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vehicles at an auction

4 Things to Know When Buying a Used Car at an Auction

Auto auctions allow buyers to purchase used vehicles through a bidding process. This usually ends up being a lot less than what a dealership would charge. Not all auctions are open to the public, but some are. To find auctions in your area, you’ll have to do some research. Auctions are available both in-person and online, allowing you to choose the method of shopping you prefer. 

While auto auctions can turn up a great deal, there’s also the risk of buying a beater car. Below are four things to know about buying a used or repossessed car at an auction. 

1. Pick the Right Auction 

Both brick-and-mortar and online auctions are available. Some say that the best deals can be found in person, though shopping online is more convenient. It really depends on how you prefer to shop. You can usually shop at auctions for free, but prepare to pay some type of fee to make a bid whether it’s online or in person. 

Another thing to watch for is public vs dealer auctions. Public or open auctions are available to the public. Dealer auctions are only open to those who hold a dealer’s license. Unless you work at a dealership, you probably don’t have a dealer’s license.

2. Determine Your Risk 

Many people use the “stoplight system” when shopping at auctions. This system helps buyers assess their risk and compare it to the price of the vehicle. 

  • A “green light” means that the vehicle is free from any known defects. Arbitration may be possible if severe problems turn up. 
  • A “yellow light” indicates that the car has some issues. However, arbitration is not an option. 
  • A “red light” is sold as-is. Repossessions are essentially “red light” cars because you purchase them in their current condition. 

3. Know How to Bid 

It’s easy to cave and bid more than you should on a car you really want, especially if there is other interest available. But there are many factors that will influence whether or not you get the car, so only bid what you are comfortable paying. You also want to leave money in your budget to take care of any problems that turn up. 

To help with this, it’s best to bring along someone who knows about cars. They can help determine the best bid to make, preventing you from over-bidding on cars that aren’t worth it and under-bidding on those that are a great deal. 

4. Inspect the Vehicle 

Cars sold at auctions are rarely available for test drive. So, you’ll have to rely on your knowledge to assess its condition and value. There are a number of resources you can use online such as Kelley Blue Book, CarConsumers.org and Nada Values. These guides can give you the confidence you need to identify the best vehicles and make an accurate but reasonable bid. 

RepoFinder has a great selection of repossessed cars, trucks, SUVs, motorcycles and recreational vehicles. View our database for free and find repos in your area. If you want more features, consider upgrading your account to RepoFinder Pro for just $4.95 a month – cancel anytime!

orange jeep

How Does RepoFinder Differ from Dealer-only Auctions?

RepoFinder offers a simple directory of banks and credit unions across the U.S. that sell repossessed vehicles. Repossessions are vehicles that have been taken back by the banks when the owner falls behind on payments. Sometimes, these vehicles are taken without warning or court approval. 

To use our services, all you have to do is click on your state and you’ll see a list of banks and credit unions in your area that sell repossessions. Some have active listings, and some may not. Be patient and check back often, as things change daily. Our services are free to use. When you find a vehicle that you like, you can negotiate with the banks and purchase it at a discount. 

Why Do Banks Sell Repos for Cheap? 

Because banks make their money by lending money to others, the last thing they want to do is take back a car. However, this is the only way to recoup some of their losses. So, they’ll usually see if the owner can catch back up on payments, and if not, the bank will sell the vehicle to the public at a discounted price. 

There are two main reasons why banks sell repossessed vehicles for cheap. The first is that they want a quick sale. Cars take up space, and banks aren’t dealerships, so they want them off their lots as quickly as possible. Second, repossessions often need some type of maintenance, so buyers need to factor this into their purchase. To make the vehicles more attractive, banks discount the price to offset some of the repair costs. 

How is RepoFinder Different from Dealer-Only Auctions?

Each bank and credit union has a different way of marketing their repo inventory. Many prefer to sell their vehicles at dealer-only auctions because they can get rid of many vehicles at one time. Remember, banks are just looking to recoup some of their losses. They don’t care where the vehicles go. 

Dealer-only auctions are closed to the public. Only licensed dealers can attend. And unless you plan on getting into the business of selling vehicles, you won’t be able to obtain a dealer’s license. Dealers purchase the vehicles they want at a discounted rate, fix them up and resell them to the general public. Often, these vehicles are marketed as “repos” but they technically are not. A real repo sale happens between you and a bank. 

What are the Benefits to Buying Repos Direct from the Bank? 

When you buy a repo directly from the bank, you can expect a wide range of benefits: 

  • Cheaper price. Repos are sold at heavily discounted prices. 
  • Ability to negotiate. You can offer less than what the banks are asking for. Don’t be afraid to negotiate! 
  • Bank financing. Because you’re buying from the bank, you can also get help with the paperwork and financing. 
  • Commission-free. A commission-free environment ensures less pressure on you, plus the ability to work out better pricing. 
  • No emotional attachment. Banks have no emotional attachment to their vehicles. 

Ready to shop with RepoFinder? Enjoy a comprehensive list of banks and credit unions in your area that are selling repossessions. 

BMO Harris car repo

Purchasing a Repo Car from BMO Harris

BMO Harris has more than 12 million customers that count on them for personal and commercial banking, wealth management and investment services. They are the 8th largest bank in North America, based on assets. The bank takes great pride in helping customers make the most of their money. 

With millions of customers, there will always be some who default on their loans. This sometimes happens with auto loans. 

BMO Harris Auto Loans 

When purchasing a car, a buyer may have to put some money down to cover the down payment and title fees, but they can finance the rest of their purchase. What some people don’t realize is how expensive car payments can be, especially once the interest rates are added on. 

Here is some basic information on BMO Harris auto loans. 

  • BMO Harris will finance cars, motorcycles, boats and RVs. 
  • Auto loan amounts start at $5,000 and go up to $30,000.
  • All loan products have fixed APRs that range from 4.8% to 7.11%.
  • Maximum loan terms are 72 months.
  • Loan origination fees are up to 1% of the loan amount.
  • Borrowers are charged late fees. 

When Auto Loan Borrowers Default 

When taking out a loan, the borrower agrees to pay it back according to the loan agreement. If, at any time, they can’t make the loan payments, the loan will go into default and the car can be repossessed. Usually, it only takes a few months for this to happen, as the bank isn’t going to continue losing money every month. 

Once the vehicle is repossessed, it is usually sold at an auction. Everyday people can bid on the vehicle, though dealerships are good at picking up decent cars and reselling them at a higher price. This is why it’s best to buy repossessions directly from the bank, as you don’t want to buy a repo with a price markup. 

Where to Find BMO Harris Repo Cars 

The best way to find repossessions from BMO Harris is by visiting their site directly. Being a large bank, their inventory changes often. Visit RepoFinder.com and click on the state you live in. You can then search for BMO Harris’ inventory of repo vehicles. Also, because BMO Harris provides financing for motorcycles, boats and RVs, you can also find these vehicles for auction. 

Currently, BMO Harris is only in ten states: Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri, Nevada, Washington and Wisconsin, so do keep this in mind. You always want to be able to see the car before buying, so shop only as far as you’re willing to drive.