Repossessed Cars: Essential Things You Need to Know About Used or Repo Vehicles
Updated on September 30 2023
Are you looking to buy a new car? You essentially have two options: brand new or used. However, there's a third and better option waiting in the wings. Repossessed vehicles or repo cars are worth considering for many reasons. Unlike other choices in the used car market, repo vehicles have low mileage and significantly lower prices, to name just a few benefits.
But for some reason, repossessed cars present a blurry image in the eyes and ears of the buying public. In truth, repo cars offer superb value for money for what is, essentially, a 'slightly used' vehicle. Here are the answers to the most pressing questions about repossessed vehicles and why you should seriously consider buying one.
What is a repossessed vehicle?
First, let's tackle the elephant in the room. Repossessed vehicles are 'taken back' or repossessed by the bank from previous owners due to non-payment of existing car loans. When you buy a new car under financing, the bank remains the vehicle owner until the buyer completes the car loan payments.
It's why banks possess the original OR/CR (Original Receipt and Certificate of Registration) of the vehicle until the buyer fulfills the car loan. In turn, the buyers only get a Xerox copy of the vehicle documents and will only get the original papers after completing the loan payments.
How does a vehicle get repossessed by banks or lenders?
Good question. For example, let's say you bought a new car with a 48-month loan. If there's a one or two-month delay in your monthly payments, the bank will start the repossession process depending on your loan contract. In some cases, banks and lenders will give you until 90 days before fast-tracking the repossession process.
And if you've fallen behind on monthly car payments for 90 days or longer, your precious ride is very much at risk of getting repossessed by the bank.
After repossession, where does the vehicle go from there?
After the bank has repossessed a car, the vehicle goes to nearby warehouses for storage and safekeeping. Banks will typically have numerous warehouses scattered around the country.
How can I buy a repossessed car?
You have two options in buying a repossessed car. First, you can do it the hard way by going to the bank, asking for a list of repo vehicles, and physically visiting each warehouse to inspect the car of your dreams.
Of course, you can do it the easy way by visiting Automart.ph. Automart has forged a partnership with the Philippines' most significant and most trusted banks to streamline the repo car buying process.
What's more, Automart has a wide variety of managed repossessed vehicle warehouses all across Metro Manila and other parts of Luzon, Visayas, and Mindanao.
You can view all repo cars from Automart's warehouses in Quezon City, Makati, Cavite, Batangas, Laguna, Paranaque, Bulacan, Cebu, Davao, Bacolod, Cagayan de Oro, and Palawan from the website without leaving home.
And if you are interested in a particular repo car, Automart's expert staff are willing to assist with answering your inquiries to facilitate a smooth buying process.
Do I have to bid when buying a repo car?
Yes and no. Fleet buyers stand a chance of saving more money by bidding on two or more repo cars. But for solo buyers, Automart has a listing of repo cars you can buy now by clicking on the, umm, Buy Now button.
If there is no Buy Now tag on the listing, the vehicle must go through a bidding process. You can learn more about the buying and bidding process of repossessed cars by reading this comprehensive guide.
How can I physically inspect a repo car?
First, you need to register at Automart’s website. Don’t worry; the registration is free! You can still browse the website without registration, but you’ll need to register to schedule an inspection.
After scheduling, you can visit the warehouse and view the car. You don’t need to pay anything to view a repo car, but you do need to pay an hourly fee (₱700 per hour) if you want our mechanic to inspect the vehicle for you. Of course, you can bring along a mechanic during the inspection, and we won’t hold it against you. ☺
What are the advantages of buying a repo car?
The benefits of repo cars are plenty. Repossessed vehicles offer more bang for your buck by offering lower prices for typically a ‘slightly used’ new car. Remember, it usually takes 90 days for banks to repossess a vehicle, so we’re talking about new cars with low mileages, fresh interiors, and intact warranties – not to mention bargain prices to boot!
You can learn more about the benefits of repossessed vehicles by reading this short guide.
What are the drawbacks of repossessed cars?
There are pros to buying a repo car, but there are specific drawbacks to know, as well. The biggest drawback is the inability to test drive the vehicle, but there’s a valid reason for this. If banks allow repo cars to be test-driven by potential buyers, the mileage reading will increase and further affect the car’s resale value.
If you want to know more about the drawbacks of buying a repo car, this handy guide will shed some light.
Should I consider a repossessed car?
Absolutely! Automart has an impressive lineup of repo cars from pickup trucks and SUVs, to sedans and hatchbacks, and even sports cars and performance vehicles from top brands like Toyota, Mitsubishi, Honda, Mazda, Subaru, Ford, Nissan, Isuzu, Suzuki, BMW, and many more!
Repossessed vehicles are not only a better second-hand option, but it gives you a chance to own a car that you previously thought was unattainable if bought brand new. For instance, Automart has a listing of 2019 Toyota Fortuner 2.4 G Diesel 4x2 models starting from as allow as ₱1,030,000. For the record, brand new prices for the same model starts at ₱1,687,000.