If you are interested in buying a vehicle at a decent price, you should think about visiting vehicle repo and liquidation auctions. An auction is a great place to find vehicles at really good prices.
You may find some vehicles that are worse for the wear, but sometimes you will find a still new, great quality vehicle for a very good price. Repossessed vehicles and vehicles that are the product of liquidation are often really good buys. It is a good idea to find out where the closest auctions of this kind are taking place and to consider checking them out.
What is a repossessed vehicle?
When most people try to buy vehicles, they realise that they will have to get financing from a financial service provider in order to purchase and pay for the vehicle.
Most reputable financial service providers will want to see two things before they will approve the loan. Firstly, they will want to know that the individual who has applied for the loan has a reliable, steady income that will cover their essential living costs as well as their loan repayments and interest.
Secondly, the financial service provider will want to know that the individual has a good credit record and a high credit score. Reputable financial service providers will only approve loans to individuals who are at low risk of not being able to make their loan repayments.
However, no-one can be sure that their financial situation is stable.
Should the individual suddenly lose their job or is faced with high unexpected payments like a vets bill or another sudden medical expense, the individual will find themselves in a position where they cannot make their loan repayments.
When this happens, the financial service provider will send them a warning, and if they still do not make their payments the bank will repossess the vehicle. The financial service provider will then hold the vehicle for a short time to give the individual a chance to come up with the money that is owed, and if they do not receive the money they will sell the vehicle off in order to make some of their money back. Usually, repossessed vehicles are sold through auctions.
What is liquidation?
Liquidation occurs when an individual is becoming overwhelmed by their debt. When the debt starts to add up, and if the interest rates increase or compound, the individual may find that they are battling to make their loan repayments.
If the individual suddenly loses their job or is faced with an unexpected high payment, they will realise that they cannot make their payments. They may then liquidate all of their possessions in order to come up with the money to get themselves out of debt. Companies and businesses also go through this when they are in need of cash.
Why should you buy a repossessed vehicle or one that is the product of liquidation?
A repossessed vehicle or vehicle that is on sale because of liquidation will often be quite new and have a low mileage. The vehicle may still look new and be aesthetically pleasing and it may still have its service plan or warrantee in place.
This will save the new owner a lot of time and effort on maintenance and repairs. At an auction, instead of an extortionate set price being put down by the seller, the potential buyers decide what they are willing to pay for the vehicle. Because financial service providers want to get rid of the vehicles as quickly as possible, they will often sell them at very low prices.
Where can you find out about vehicle repo and liquidation auctions?
Many financial service providers, like First National Bank and Standard Bank, run their own auctions. Other banks pass the vehicles on to large, well-known auctioneering houses to get the job done.
It is a good idea to contact your bank first to find out whether they have vehicles on auction or contact My Village Auctions, Aucor or one of the other large auctioneering houses for details and advice.