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Nolan Garcia
Nolan Garcia

Buying A Car With Repossession

Vehicle repossession can remain on your credit reports for up to seven years. That feels like a long time, however, they lose some of their potency with each passing year. As we mentioned, after 12 months, some lenders may be willing to work with you if you prove your ability to repay a loan and have maintained your credit score in the meantime.

buying a car with repossession

Subprime lenders often work with borrowers in tough credit circumstances, such as an old repossession. In some cases, a car repo may be considered situational bad credit if a financial hardship caused the repossession and you had good credit up to that event.

At The Car Connection, our goal is to remove the challenges of getting financed for a vehicle. Through technology, flexible financing options and exceptional customer service, we want to give you the power to control your car-buying experience.

Repossessed vehicles, also known as repo cars, are those lenders have taken back from the registered owners. When car owners fail to make their payments on a vehicle, the lender hires a repossession company to reclaim it, sometimes without the owner's knowledge. Repossession usually occurs after an owner has missed monthly payments for an extended period and cannot resolve the problem with the lender.

Many repossessed cars are priced well under fair market value because of the negative stigma associated with the previous owner's circumstances. People who might consider buying a repo car assume that the owner's financial struggles prevented them from properly maintaining the vehicle. In some cases, an owner may have abused the vehicle as a retaliatory tactic against the lender upon learning the financial institution's intention to repossess the car. On the other hand, it is possible to find a repossessed car in excellent condition. Whichever is the case, it is vital to obtain a thorough inspection of the vehicle before purchasing it.

The effort begins with identifying lenders that are selling their repo vehicles directly to the public. Also, keep in mind these vehicles are often not prepped for sale since they have been sitting in lots from the time they were repossessed. They are generally in the "as-is" condition, which means they may have cosmetic or mechanical issues. And the buyer typically will not even get to see the vehicle until their bid is accepted. Before bidding, be aware of the car's general market value based on make, model, year, and mileage.

For auctions, it is necessary to have cash on hand or pre-approved financing in place. And since everything is sold "as-is," having a certified mechanic along with you will help to ensure your purchase has no significant issues.

Repo companies are the middlemen between the lender who has repossessed a vehicle and the buying public. A buyer can find these companies online, do a quick search of their inventory, and place a bid, all in one sitting. So, this route can be very convenient.

From a pricing standpoint, a reseller will typically want more for a vehicle than buying directly from a bank or at an auction because they will be adding their fees to the bottom line. But in most cases, resellers are interested in quick sales and high volume, so the price will still likely be on the low side.

If haggling sounds better than bidding, buying from a used car dealer is the most straightforward way to purchase a repo vehicle. The price tag may be somewhat higher because dealerships have more costs to cover, but there's almost always room for negotiation.

Unlike with an auction, the dealership will most likely have cleaned the car and made certain mechanical repairs. The dealer may also include a short warranty, handle the titling and registration paperwork, and offer to finance the car. It is a one-stop-shop that is more familiar to consumers than any other.

Though the situation is unfortunate, repossessed cars offer an opportunity to those looking to purchase a new vehicle at a hefty discount. However, budget-minded buyers need to be wary of the risks before buying a repossessed car.

On the flip side, a repossessed car may be in good condition, especially if the previous owner bit off more than they could chew with their original purchase and had it repossessed shortly after buying it. In such a case, their misfortune could be to your benefit.

As a result, repos sold by resellers are likely to be more expensive than those sold directly from a lender or at auction. Fortunately, the trade-off is a vehicle you can be more confident about buying.

Depending on your budget and comfort levels, it might be worth forking over some extra money for the convenience and peace-of-mind in buying from a dealer. Many dealers will work with lenders to help you get a good deal or help finance the sale in-house, in addition to handling the paperwork.

We help people save money on their auto loans with a network of 150+ lenders nationwide.* This value was calculated by using the average monthly payment savings for our customers from January 1, 2021 through December 31, 2021.

Either of these options will improve your position, especially if you need to apply for a car loan now. Applying with a creditworthy co-borrower means applying for a joint auto loan and, if approved, each party has equal responsibility for repaying the loan and rights to the vehicle. A cosigner is someone who agrees to make any missed payments or even repay the full loan if needed, but has no rights to the vehicle.

Not all auto lenders will accept applications from consumers with bad credit, so find a lender that does, such as RoadLoans. As a full-spectrum lender, we have many years of experience helping customers get the financing they need following repossession.

At RoadLoans, we not only make the financing process quick and easy, our customers enjoy the advantages of preapproval, too. It takes just a few minutes to apply securely online, in your own time, and we provide instant decisions. If approved, select the loan offer that best suits your needs and visit the dealership already knowing the terms of your financing. Seeing just how much you have to spend enables you to shop with the confidence of a cash buyer, and negotiate a great deal on your next vehicle. If the dealership offers you financing as well, you can go with the best offer.

2022 Santander Consumer USA Inc. All rights reserved. NMLS Consumer Access ID 4239.RoadLoans is a registered trademark of Santander Consumer USA Inc. Chrysler Capital is a registered trademark of FCA US LLC and licensed to Santander Consumer USA Inc.Chrysler, Dodge, Jeep, Ram, Mopar and SRT are registered trademarks of FCA US LLC.ALFA ROMEO and FIAT are registered trademarks of FCA Group Marketing S.p.A., used with permission.All other trademarks are the property of their respective owners.

If the dealership refuses to work with you, consider filing a complaint with the Better Business Bureau, your state attorney general's office, the Federal Trade Commission, and/or the Consumer Financial Protection Bureau.

What happens if you fall behind on your payments? If you are late on a payment, the creditor can choose to accelerate your loan. You will then owe the creditor the entire amount due on the loan. If you can't pay the entire amount due on the loan in a certain time period (usually 10 days), the creditor can then take back, or repossess, the property. The creditor must follow the law when he repossesses your property. The law that applies will vary depending on where the repossession takes place. If the creditor wants to repossess your property from within the boundaries of the Navajo Nation, there are much stricter requirements than if he wants to repossess your property outside of the boundaries of the Navajo Nation. If your creditor follows the law, the creditor will eventually be able to repossess your property.

What should you do? The best way to avoid repossession is not to be late on your payments. But sometimes you fall behind because of events outside your control. What do you do?

After repossession After your vehicle is repossessed, or if you turn in the vehicle without getting the dealer to agree to waive any deficiency, you may still owe money to the dealer. This is called a deficiency. The deficiency is the amount still due on your loan after the vehicle is resold. The repossession and deficiency will be reported to your credit history and will damage your credit for approximately seven years. is a project of the Arizona Bar Foundation in partnership with Southern Arizona Legal Aid Inc., Community Legal Services, Inc., DNA People's Legal Services, Inc., William E. Morris Institute for Justice, and the State Bar of Arizona with support from Legal Services Corporation.

If you default on your written loan agreement, a creditor can repossess a vehicle or personal property (but not a house or land) without advance notice to you and without filing a lawsuit. This is because your installment loan is secured by the property. The back of the car title shows who has a security interest or lien against the car. The most common reasons for repossession are being late on monthly payments or failing to maintain car insurance.

A repo man (a person hired by the creditor to take the asset subject to repossession) can come onto your property anytime but cannot enter your house without permission. Property can be repossessed by the creditor or by a person hired by the creditor as long as the process does not involve a breach of the peace. If there is a breach of the peace caused by the repo man, the creditor could be liable. If you feel threatened by the person who has been hired to reclaim the property, call the police. It is against the law to prevent the repossession of the property or threaten the person that has come to repossess it. If you try to prevent the repo man from taking the property, you violate your security agreement and may expose yourself to criminal penalties. 041b061a72


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