Repossessed (repo) cars and lease returns can represent a significant opportunity for savvy car buyers. These vehicles, often available at prices below market value, come from different paths – repossessions due to loan defaults and lease agreements ending. If you’re in the market for a used car and looking for a bargain, understanding where to find repo and lease cars for sale is key. This article will guide you through the various avenues to explore and provide tips on how to make a smart purchase.
Understanding Repo and Lease Cars
Before diving into where to buy, it’s important to understand what repo and lease cars are. Repo cars are vehicles that have been taken back by lenders (banks, credit unions, or financing companies) when the original owner failed to keep up with loan payments. Lease cars, on the other hand, are vehicles returning to dealerships or leasing companies at the end of a lease term. Both types often end up being sold at reduced prices to recoup losses or clear inventory.
Prime Locations to Purchase Repo and Lease Cars
If you’re wondering “where are repo and lease cars sold?”, here’s a comprehensive guide to the best places to find them:
1. Public Auto Auctions
Public auto auctions are a primary source for repo and lease cars. These auctions are where banks, leasing companies, and other financial institutions sell off vehicles they’ve repossessed or received as lease returns.
- Variety and Volume: Public auctions typically have a large inventory of vehicles, ranging from cars and trucks to SUVs and vans. You can find various makes, models, and years, increasing your chances of finding something that suits your needs.
- Potential for Low Prices: Because auction houses are motivated to sell vehicles quickly, prices can be very competitive, often below typical used car market values.
- Due Diligence is Crucial: Vehicles at public auctions are usually sold “as-is,” meaning there are no warranties and limited opportunity for thorough inspection before bidding. Buyers need to be prepared to do their research and potentially take on some risk.
Alt text: Rows of used cars lined up at an outdoor auto auction lot, ready for bidding.
To find public auto auctions near you, search online for “public auto auctions [your city/state]” or check local listings. Many auction houses also have websites where you can preview upcoming auctions and vehicle inventories.
2. Online Auto Auctions
The internet has expanded access to repo and lease car auctions significantly. Online auto auctions bring the auction experience to your fingertips, offering convenience and a wider selection.
- Broader Selection: Online auctions often feature vehicles from across the country, giving you access to a much larger pool of cars compared to local physical auctions.
- Convenience and Accessibility: You can browse and bid from the comfort of your home, saving time and travel costs.
- Detailed Vehicle Information: Reputable online auction platforms usually provide detailed vehicle descriptions, photos, and sometimes vehicle history reports, allowing for better informed decisions than traditional auctions.
- Competition: Online auctions can be competitive, and it’s easy to get caught up in bidding wars. Set a budget and stick to it.
Popular online auto auction platforms include:
- Copart: A large online auction with a wide range of vehicles, including repo and lease cars.
- IAA-Insurance Auto Auctions: Similar to Copart, IAA also features a vast inventory.
- Manheim: Primarily for dealers but also has some public access options or dealer-assisted purchases.
Always research the specific online auction platform, understand their terms and conditions, and be wary of hidden fees.
3. Directly from Leasing Companies and Banks
Sometimes, leasing companies and banks sell repo and lease cars directly to the public, bypassing auctions.
- Potential for Better Deals: Buying directly can cut out the auction middleman, potentially leading to better prices.
- More Information: Dealing directly might give you access to more vehicle history and allow for more direct questions about the car’s condition.
- Limited Inventory: Direct sales from leasing companies or banks might have a less consistent and smaller inventory compared to auctions.
To explore this option:
- Contact Local Banks and Credit Unions: Inquire about their repo car sales or asset disposal departments.
- Check Leasing Company Websites: Some leasing companies have sections on their websites for purchasing off-lease vehicles.
- Dealership Connections: Sometimes dealerships that are part of larger auto groups also handle lease returns and repossessions for their associated financing arms.
4. Used Car Dealerships
While less direct, used car dealerships are another place where repo and lease cars eventually end up. Dealerships often purchase vehicles from auctions or directly from leasing companies to add to their used car inventory.
- Convenience and Inspection: Dealerships offer the convenience of browsing a lot, inspecting vehicles more thoroughly, and often provide some level of warranty or certification on used cars.
- Financing Options: Dealerships typically offer financing options, which can be helpful if you need to borrow money for the purchase.
- Higher Prices: Prices at dealerships are generally higher than at auctions because dealerships need to cover their overhead and make a profit. However, you might still find deals on repo or lease cars that they are motivated to sell quickly.
When shopping at dealerships, ask directly about the origin of used cars. They might disclose if a vehicle is a lease return or a repossession, especially if it’s priced competitively.
Tips for Buying Repo and Lease Cars
Finding where repo and lease cars are sold is just the first step. To make a successful purchase, consider these tips:
- Do Your Research: Before you start looking, know what kind of car you want, its market value, and your budget. Research specific makes and models for reliability and potential issues.
- Inspect Thoroughly: Whenever possible, inspect the vehicle in person before bidding or buying. Look for any signs of damage, wear and tear, and mechanical problems. If you’re not mechanically inclined, consider bringing a trusted mechanic for a pre-purchase inspection.
- Check Vehicle History Reports: Obtain a vehicle history report (like Carfax or AutoCheck) to check for accidents, title issues, and service history. While not always perfect, these reports can reveal important information.
- Understand “As-Is” Sales: Be aware that repo and lease cars are often sold “as-is,” meaning no warranties are provided. Factor potential repair costs into your budget.
- Set a Budget and Stick to It: Auctions can be exciting, but it’s easy to overbid. Determine your maximum price beforehand and don’t exceed it.
- Consider Financing: If you need financing, get pre-approved for a loan before you start bidding or shopping. This will give you a clear idea of your budget and make the buying process smoother.
- Be Patient: Finding the right repo or lease car at the right price might take time. Be patient and persistent in your search.
Are Repo and Lease Cars Worth It?
Buying repo and lease cars can be a great way to save money on a used vehicle. However, it’s essential to approach these purchases with caution and do your homework. By understanding where to find these cars and following smart buying practices, you can increase your chances of driving away with a valuable deal. Remember to prioritize thorough inspection and research to make an informed decision and enjoy the potential savings.
