repo cars

[Denise 20352]

   How much do repo cars really sell for?  As I understand it, the finance company is not allowed to sell them for significantly below market value, but what does that mean?  And where do they sell them?  Auctions?

thanks

-denise

[Mick]

Hello Denise
Reposession vehicles are resold by the lenders to attempt recovering as much as possible close to the amount they are owed.  
Insurance companies usually sell cars involved in accidents; and plain tow companies do sell cars to the public to recover tow + storage costs from owners who did not pay the bill, after mandatory waiting times and lien paperwork.
If they can profit beyond the amount that fits the bill, they will try.
All can yield good opportunities if patient enough for a good deal to show up, and bargaining is expected.
Mick

[Denise]

  I wish things were that good.  Actually, Im wondering what would happen if mine were to be repossessed.

-denise

[Richard Sills - CLC #936]

Denise,

Not a good idea -- the lender will sell the car for what will probably be a distress price, deduct its expenses from the proceeds, and hold you responsible for the amount by which your loan balance exceeds the net sales proceeds.  You would probably come out better if you can retail the car through a private sale and arrange to borrow (or otherwise pay) the difference between the amount you get and the loan balance.  Either will be a bitter pill to swallow, but the repo route is bound to be far worse, and would also be a much worse "hit" on your credit reports.

Richard

 

[Bruce Reynolds # 18992]

Richard,

I totally agree.

The Repo Companies dont care what they sell the item for, they just want it out of their storeage area, and then suck the person dry for the remaining funds, plus interest.

But Denise, you might be able to sell it easier now that the SUVs are having problems.   People will be clambering to get back to a "cheaper" form of motoring.

Bruce,
The Tassie Devil(le).
60 CDV

[Virgil Perkins #19943]

Generally speaking, the bank or finance company disposes of repos at wholesale auto auctions, where dealers only may bid. The lender will attempt to sell the repo for the highest dollar obtainable so as to reduce impending loss. Auctions are popular due to the exposure to many buyers, thereby satisfying due dillengence requirements to get maximum exposure and the best sale price. Many repos are in less than desirable condition and will not pull premium bidding. Repossession costs, prep of the unit for sale (if it is a decent unit) and sale fees are subtracted from the sale price for net sale amount which most likely will result in a defiency balance owed by the customer. Unless there is a repayment arrangement, mutually agreed to by the lender and customer, in effect, legal action may be taken by the lender to recover the defiency. The reporting of repossession and/or legal action to the major credit bureaus sinks the customers credit rating and makes them target for sub-prime lenders high rate of interest in ensuing purchases which must be financed. Bottom line: everyone loses.

[Denise]

  Thanks for the info.  That rules out giving it back to the finance company.  I just got hit with a bill from the state of Arizona for $840 to renew the tags, plus $500 payment and $50 insurance, comes to $1400 this month.  No way am I going to pay that for a car that I dont even drive, so Im just at a total loss as to what to do.  Let the tags expire, I guess.  Nobody is buying cars right now, and even so, nobody will buy a car from an individual unless he sells it for low wholesale.  Its an expensive lesson, but I will never think of buying a new car again.

-denise

[Dale jackson]

 Hi,

  I repo cars all the time. If in decent shape I resell it again. I have serval cars I have resold 3 times over. If cars wrecked or blown engine etc. I send to auction or have junk yard buy them. I just repoed an 94 ford suv last night. I will send there worthless 1000 down payment to my county da and have  the lady arresested for writing an bad check. Its an class A misdeamor with two jail term.

   My rights as lendor are but most time I dont do it. I can sue the peaple for remaining balance on car and win there default etc and maybe charge them for storage etc. I dont ever do it since its take forever sue. I am just happy to get car back and sell it again. Most the time the peaple dont have money even if sued them for an default loan. Its waste of time.

 The bank and new car will lenders will sue you and charge you maybe storage cost, auction fees repo fees. Most repo guys charge maybe 500 or 1000 to banks or whatever. My repo guy charges me 100 bucks per car lot car.

  WHATEVER YOU DO DONT LET THEM REPO YOUR BRAND NEW CAR. IT WILL SCREW UP YOUR CREDIT AND YOU END IN COURT. I WOULD JUST KEEP PAYING YOUR CAR NOTE AND STORE CAR IF NOT GOING TO DRIVE IT. PUT INSIDE AND NOT OUTSIDE SINCE SUN WILL DAMAGE THE CAR.

  I would just run an ad in autotrader for 49.95 intill it sales. If takes an year to sale or whatever. You could sale for cash and pay off differce on what is owed on loan.

 Try carmax or call locol car dealers to see how they will pay for it. etc.

 have fun dale

  I

[Yann Saunders, 12588]

...or do like me:  

1.  NEVER buy anything on credit (apart from your home, and only if necessary).  Think about it.  Is it "smart", in your opinion, to "buy" $100 from a lender for $110? Not n my books.

2.  Buy good, used, one-owner cars with all the service records and mileage circa 80-100K. Im onto my fourth used "Bew-Hick" (still got three) and never had a major repair ($200 or more)with any of them in 9 years.

3.  If you cant afford to pay cash, DO WITHOUT !

Free advice from a "dour Scot" that carefully counts his pennies.

[David #19063]

Hi Yann,

By the way, how are you enjoying that very low mileage Roadmaster Wagon you picked up?

$200 max, eh?  Thats nothing these days when a diagnostic runs over $70.  Plugs are $10/each and Cadillac wires run near $150 for a set.

I hope your luck holds out.

However, you have given good advice.  I also have never bought a new car due to the outrageous depreciation (youcan ask Denise about that) and because I can buy a way nicer used car for less money than any new car out there.

Plus, NO PAYMENTS!  I OWN it!

David

[Eric Maypother CLC #15104]

To Denise,
Some people might be tempted to go shopping in a bad neiborhood and forget keys in ignition

Not that I would suggest something like that

I have heard stories though of people paying someone to steal thier cars.

Eric

[David #19063]

Unfortunately, you get market price as opposed to replacement price from insurance.

And the market price figures in all the wholesale auction dealer to dealer prices which we do not get.

But them again, you do not have to waste time selling it.

Or park it by my house and a drunk or uninsured or suspended license or all of the above will creme it...LOL!

David

[Joe G CLC 12138]

A word of caution on buying Repos....

Many people who are in a position to lose the car are in bind financially. When youre broke, car maintenance is not as important to you as food on the table. Especially if you know the banks getting the car back when they catch up with you."Why baby the car....lets have some fun". Some of these things are severely neglected or abused.

Another problem is the "lemons". Some people just get tired of throwing good money after bad at a car. Sometimes the loan balance plus ANOTHER needed repair sends it way over the limit of what its worth. Theyd rather walk away than end up with a $20,000 in a car thats only wort $10,000.

Some of the second problems are caused by the first problem. There can be bargains, but go into it with both eyes open.....

[Denise]

  Ive spent $7500 on my hearse in the last couple of years, and havent even started on the body work or gone very far into the engine.  But I do good maintenance.  When something goes wrong with a system, I assume that the rest of the system is probably worn out too, so I replace everything.  The result is that Im very happy with the work, and I dont have any problems with it down the road, so to speak.  I just had a leaky hydroboost unit and I replaced everything in the system except for the lower unit, and it is sweet.  You can steer it with your fingernail.  When I had a charging system problem, I took the alternator to the parts store, it tested OK, but I told them to give me a new one anyway, the best one that they had, and a new battery.  I am not going to buy any more cars, new or used, for years to come, and it wont be long until the ones that I have are caught up on a rigorous maintenance schedule, and as dependable as you would expect a new car to be.

-denise

[Denise 20352]

  And silly me, I cancelled the GAP insurance.  Yes, the thought of leaving the keys in it has occured to me, but some kid could take the car and end up killing somebody with it.  I never was very good at being dishonest anyway...if I had an opportunity to get away with a crime, I would probably be one of those stupid people who turn themselves in.

-denise

[Denise]

  hehe the cost of this years registration was enough to make me give up.  Sad, but I have to laugh.

-denise

[Dale jackson]

 On my cars i get back after we repo them are worse shape than I bought the first time. I have spend money to reco them after i get back. They dont care about it and they drive into ground. It varies on what i got do.
  Cv axles, water pumps, trashed out interior with stains etc. dents scratchs all over paint etc.

  They run the engine without changing oil and its dark black . Its like dont care and just rag out car. I have had cars come with antifreaze in brake fluid. Cars that come back that cant be driven 20 miles per hour with busted cv joints.

  Its amazing how bad or hard they drive them. On the 94 ford suv i repoed this week. They took sep 14 2005 and drove it 3000 miles. I have replace 4 tires, waterpump, change oil , tune up, and have interior steamed cleaned, work on transmission, fix one broken side glass. Its trashed and it like gallen low on antifreaze. I was luckey they did not ruin the engine from leting it get hot.


 This truck I bought in feberay from first guy. It was almost peferct when i bought it. I was never going sale but they wanted buy it. It was personal driver for 3 or 4 monlths. It was an super clean truck i drove before they bought it.

 Since they wrote me bad down payment check . I guess they were trying to steal my truck or just drive intill it broke down or i repoed.

 They did more than thousand dollers worth damage to truck. I guess the da will try get my money anf throw the lady in jail in writing an hot for 1000 bucks.  

  I used to love my ford suv and wish i never sold it . I will try to fix and clean it up to maybe keep it and not sale.  dale

[Yann Saunders, 12588]

Right on, David!  Trouble with most people is what they perceive to be an essential need to out-Jones the Joneses!

On the other hand (and I believe I said it before) Im happy there are people stupid enough to get deeper and deeper in debt just so they can drive new cars every 2-3 years.

Thats the only way I can get hold of good used ones, usually every 10 years ...unless a good deal comes up, like that 94 Roadmaster wagon with only 46K miles that I got from the wife of a surgeon in Mobile AL, in January.  Believe it or not, however, that one is not as "tight" as my other 94 wagon which has "only" 135K miles; I got that one three years ago from the wife of a preacher !

[Bruce Reynolds # 18992]

Yann,

The reason the vehicle from the Preachers wife was better, is probably because of "Divine Intervention", whereas the other one was probably wasnr "Doctored" enough.

Bruce,
The Tassie Devil(le),
60 CDV