1. Contact the bank and inquire about the steps on how to purchase repossessed vehicles. Ask for a list of their repossessed vehicles. Inquire about other additional expenses not included in the price. You can find some of the lists of repossessed vehicles from the links on my previous post Bargain Prices on Bank Foreclosed Properties. Once you have a list of the vehicles available for auction, check for low mileage vehicles that are within your budget. Some banks provide photos of the vehicles available for auction. Once you are done browsing all of the list from the banks, make a list of the vehicles you are interested in purchasing.
2. Search the net for the average resale value of these vehicles. Research about common issues that are common to that particular model. This will be one of the benchmark for deciding whether the vehicle is a bargain or not.
3. Check LTO if the vehicle has pending violations or if the registration has already expired. This can be done through SMS.
4. If the car plate is provided by the bank, contact the vehicles service center. Inform them that you are planning to purchase the said vehicle. Ask them if they have a record of the particular vehicle and whether it was regularly brought in for scheduled maintenance.
5. Inquire from the bank where their storage facility is located and inform the bank that you would like to inspect the vehicle personally. It is better you call the bank first before visiting their storage facility since some banks only allow you enter the premises if you set an appointment.
6. During your ocular inspection, bring a trusted mechanic which is familiar with the vehicle you are interested in purchasing. It is advisable to bring with you a battery and a couple of liters of fuel for testing. The batteries on some of these vehicle might be dead due to months of being idle in the banks storage facility.
7. Try starting the vehicle and listen to unusual sound during starting.While your mechanic is examining the engine here are a few things you could personally check.
- Check for scratches, dents, and other signs of damage on the car. If the bank's storage facility is an open lot look for signs of rust on the cars body.
- Examine the headlights and taillights for signs of damage and turn lights on.
- Turn on the air-conditioning of the car and check if it is functioning properly.
- If the vehicle has power windows, test all the windows of the car.
- Inspect the interior for any damages on the panels or handles. If the interior is extremely dirty, this is a sign that the former owner didn't properly maintain his/her vehicle.
- Look at the thickness of the tires of the vehicle. If all four tires are thin and worn out you might want to consider this as additional expense.
- Check for any missing tools, spare tire, spare keys or other accessories. Some of these cars have been caibalized by the previous owners, some are even missing the car stereos and speakers.
- Make a list of all the damages and missing parts and accessories of the vehicle and make an initial estimate of how much it will cost to repair and replace the missing parts.
8. Compute the total cost of the vehicle including the estimated cost of repairing the vehicle, replacing the worn out parts, cost of transferring the vehicle to your name, and other cost such paying for penalties if the registration of the vehicle is already expired.
Once you are done assessing the vehicle and have decided to purchase it, go to the bank and ask for a form to bid on their repossessed vehicles. Try not to bid too high even if you are really interested on the vehicle. Most bidder usually won't bid too high since they too are in it to purchase the car at a bargain price.
If ever the price of the vehicle you are interested is too high, I suggest you wait for a couple of months before making a bid. Banks regularly reduce the prices of their repossessed vehicles if no one bids on it. If someone else bids on that vehicle at that price, wait for the next auction and look for another car. It is better to be patient and buy at a bargain price than to rush in something that you might regret later on. I hope this article will help you in your search for purchasing a bargain repossessed vehicle.