Are Bank Repo Cars Good Deals
Salvage Cars April 25th, 2010Are bank repo cars really a good deal? This has been on many used car buyers' minds since the start of our current economic recession or depression.
In past years of easy credit, car companies have directly contributed to own brand defamation and devaluation by giving their cars away to reduce their inventories and increase their production. One wonders how car companies and their dealerships make money when a consumer can purchase a new vehicle with zero money down, zero interest for 60 months, and no payments for 90 days. There is also the 25 percent depreciation factor once the consumer drives the vehicle out of the dealer's parking lot.
So let's make sense of repo cars and their market. If you are one of these unsuspecting consumers, you will be basking in your new car glow until 90 days has gone by and you receive you first statement. Once you realized that the $25,000 vehicle you purchased in now only worth $19,000, you will feel lucky that the next 30 payments you make will actually help you reach break-even while the smucks who are paying interest of 6 percent (or more) will need closer to forty payments. If you start to feel uncomfortable with where this discussion is headed, it is only because you can still afford to keep making you payments. If you are unable to make your payment, you will not think twice about keeping this under water loan.
From personal experience, I can tell you that lenders will take up to 6 months to repo a vehicle. If I stop making payments on a vehicle for 6 months, what are the odds that I will pay to keep proper maintenance or proper care of the vehicle? This is a rhetorical question since the abuse of these vehicle can be past the point of possible refurbishment. Also, if people owe more than their vehicles are worth at the time of repossession, how can a person purchase these vehicles less than market or blue book value? They cannot! So buyer beware and don't buy one!
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