If you’re planning to buy a used car, then you might want to consider getting a bank repossessed vehicle. What makes repossessed units attractive is their low prices, which are 20 to 40 percent cheaper than what the car initially sells for.
Repossessed vehicles are for sale because previous owners failed to pay their bank car loans. The units are sometimes only a few years old or have low mileage. But be careful when buying repossessed cars because what you see is what you get.
Here are some tips on the pros and cons of buying a repossessed car.
Advantages of Buying a Repossessed Car
Lower Cost
A repossessed car can save you 20 to 40% off the price of a brand new car. For example, the cost of a repossessed 2018 Toyota Vios 1.3EM / T can cost Php 519,000. Compare this with the cost of a new unit at Php753, 000. Although the car’s value has depreciated by now, the Php200,000 savings is still hard to pass up especially when the budget is a major consideration.
Some banks have occasional promo prices so make sure that you watch out for these promotions.
Newer Cars in Good Condition
One good thing about repossessed cars is their good condition. It is likely that you will find cars which are only a few years old and with low mileage.You will be surprised that there are newer repossessed cars which are 2018, 2019, and even 2020 models.
Some banks indicate the condition of the car such as dents, scratches, damaged accessories, etc. which will be helpful in shortlisting your preferred vehicle.
Good Chances to Get a Good Deal
Do your research well so you can grab a great car for a bargain price.How? Simply check the market value of the car make & model that you’re looking for. Compare prices.
If the selling price of the bank is too expensive, wait for good timing. Typically, banks will lower the price if nobody bids on the cars. Be ready to make a bid once the price has been reduced.
Guaranteed Trustworthy Seller
When buying a repossessed car from a bank, you are assured that you will be dealing with a trustworthy seller. Being a reputable financial institution, banks can give legal and secured transactions. Here is a list of banks that offer repossessed cars for sale.
- BPI
- EastWest Bank
- Metrobank
- PSBank
- RCBC
- Security Bank
Car Financing Options
Buying a repossessed car requires less paperwork compared to buying a brand-new unit. You can either pay in cash upfront or get an auto loan for your purchase.
Weigh which one will work best for you. On the other hand, getting an auto loan for your repossessed car can be easier on your finances because of its monthly installment.
Disadvantages of Buying a Repossessed Car
Unpredictable Actual Condition of Car
We can’t ignore the downside of buying a repossessed car. After all, it is basically a pre-owned vehicle. This means that the car condition is dependent on the previous owner’s driving and maintenance habits.
Banks sell their repossessed cars on an “as is where is” basis.That is why buyers should understand the risks on the quality of the purchased cars. You cannot run after the bank if you find any defects or damages after your purchase.
Search Takes Time and Effort
Researching for the best repossessed car surely takes time and effort as you may need to browse a lot of listed repossessed cars from various banks. Once you’ve found the car of your choice, be ready to bid and bid a lot. These are auctioned to the public which means that people will be bidding. The bank will reject your bid if it is below the minimum amount set.
Test Drive is not Allowed
A disadvantage of a repossessed car is that you can’t test drive the vehicle prior to purchase. Repossessed vehicles are often stored in warehouses, which makes inspection and access limited. So bring someone with you, like a trusted mechanic to visually inspect the vehicle and help assess the car’s condition.
Final Thoughts
Knowing the advantages and disadvantages of purchasing a repossessed car can help you decide it this option is suitable for you. If you do your research well, you may end up scoring a great deal. Just remember to do your research well.
