You may want to think about the repo cars for sale market if you are considering purchasing a used car. Buying a “repo”, or repossessed vehicle, can take hundreds and sometimes thousands of dollars off the standard Blue Book price for that model- giving you a substantial break on purchase price. During these uncertain economic times, repossessed vehicles are plentiful and relatively easy to find, if you know where to look. Of course, care needs to be taken so that you do not end up with someone else’s problem. Finding a great repo car for sale is possible if you take a little time culling through what’s out there. The tips below will help you find the repo you want, at the price you have in mind.

A “repo” is a car that has been reclaimed by a bank, dealer or finance company due to the buyer’s inability to keep their payment contract. This situation differs from the “seized vehicle” market where cars have been impounded or confiscated by law enforcement or governmental agencies. Repos belong to banks, loan companies or credit unions which sell or auction them in an attempt to recover the balance of the loan or the fair market value of the car, whichever is greater. The owner is usually given a reasonable opportunity to buy back and reclaim their car, but if that fails to happen, the car is sold in either a private or public sale or auction.

Finding repossessed cars for sale is easy if you know where to look. Smaller banks may keep their repossessed cars on their parking lots with a sign posting the sale price and terms. Many banks now post their repo cars for sale online on their websites. But most banks or finance companies sell their repos through professional auction companies or at public sales. The auction company usually advertises in local newspapers or online and takes a percentage for each sale. Calling banks, auctioneers and newspapers can give you the date when ads will come out featuring repo cars for sale.

You will find repo cars for sale in all models, mileages and conditions. You’ll be best off doing a little research before attending a sale or auction. Have the model, price and mileage range in mind before going. You can expect to find nearly new luxury models where the buyer likely got in over their head, or perhaps suffered a divorce or the loss of a job. You will also find later model repo cars for sale that may or may not have been well-maintained at, or less than, fair market value. There will also be older, higher mileage vehicles in various conditions. Go with a specific car or selection in mind.

Except for the possibility of pocketing hundreds or thousands of saved dollars, buying a repo car is really no different than purchasing a car through conventional means. It would be wise to know the Blue Book value for the make, model and condition of the car. Look the vehicle over carefully, noting the mileage. You may want to take a mechanic with you to better determine the condition of the car. You will usually be able to start cars offered, but not test drive them. In general, you should avoid a vehicle that has been obviously poorly maintained, has high mileage for the year, or has a ticket price higher than fair market value.

Savings will depend on the individual repo, the circumstance of the repossession, and how careful you are during your search. If the previous owner was “upside-down”, owing more than the fair market value on the balance, your savings will be lower. If, on the other hand, the car was nearly paid off when the owner fell behind, your savings could amount to thousands. Generally the bank or finance company just wants to recover their investment in the car. If buying directly from the bank, you may be able to negotiate a lower price if their asking price is higher than Kelley Blue Book or NADA guidelines.

Buying cars for sale by banks can mean substantial savings. Find where and when repo cars will be sold and arrive early enough to inspect them. If you don’t know what to look for in terms of condition, take someone with you who does. Used car buying guides can be found online. To avoid getting a car that has been wrecked or rebuilt, run the VIN number through CARFAX. Follow these tips- and with a little luck, you could go home with a great used car.