By Yvette Munro
What is Car Repossession?
In a nutshell, repossession is what happens when a lender takes your collateral property because you failed to meet your financial obligations. This process is executed either by the lender himself or a person on his behalf called a repossessor. There are different ways to handle the execution process, but it is always carried out in conjunction with the binding contract.
Statistics show that car repossession cases in the country increased in recent years, particularly during the recent economic recession. Many Americans took out loans using their car as collateral. When the economy went to a slump, people with presumably stable jobs were laid off, which resulted in delays in payment and eventually repossession.
Pros of Buying Repossessed Cars
Should you buy a repo car? Here are some of its pros and cons to help you decide.
1. Low cost
One of the good things about buying these cars is that they come with a low price tag. In hopes of disposing these vehicles in the least amount of time possible, many lenders would price them low. And if you buy at the right time, you will end up with a nice car at a fraction of its original cost. And sometimes, if you scour hard and wait patiently enough, you'll find a repossessed car that is not even a year old. It's in perfect shape, there are no damages, and has low mileage.
2. Low depreciation rate
Technically speaking, repo cars are viewed as used or second-hand properties. Therefore, unlike new cars that lose their value the moment you take them out for a ride, these cars can still be sold at a value higher than what you paid them for. So before buying repossessed cars, do your research, inspect the car, and know the perfect time to participate in a car auction.
3. Fast paperwork
Another advantage of buying these vehicles is that there is limited paperwork involved in the purchase. As previously mentioned, the lender will want to sell the car as quickly as possible, so they will make it easier for anyone who would buy them. It only takes a few signatures before you can get away with your new purchase.
Final Reminder
Though repo cars are generally advantageous on your part, do not buy on impulse. And as much as possible, take someone with you to advise you on what to do. Although they are priced low, some of these vehicles may have parts that need to be repaired, which could lead you to spending more than its value.
Buying repossessed cars in Georgia? For more information, resources and great deals, take a look at the ever popular Auction Blog.
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