Buying repossessed cars can save you a bundle

Repos, or repossessed cars, can be a very attractive way to purchase a car. Every day, thousands of cars are taken back by banks and other financial institutions that haven't received payment for the loans they provided to purchase the vehicles. These repossessed cars can be yours for the bidding.

Banks loan money to purchase vehicles. The vehicle itself can be sold to return cash to the bank if the cars owner can not or will not make payments. 

When the bank makes the loan to a buyer, they place a lien on the car to make sure the buyer can't sell the car and then not pay them.

The bank is listed as the "lien-holder" on both the car title and registration. This allows the bank to be able to legally repossess the car at any time if the conditions of the loan are not met.

A repossessor is a person that has the legal right to walk into the owner's driveway and drive the car away. They can take it by getting the car keys from the owner or, if the owner is obstinate, they can bypass or pick the cars locks. They are not allowed to break into a garage but they may legally come onto the owners' property at any time during the day or night as long as they don't "breach the peace".

Sometimes the owner knows they can't continue to make payments so they turn the car into the bank - this is still listed as a repossessed car.

A new car loses its value very quickly. When a repossessed car is sold at auction it's usually for far less than the amount owed. What happens then is that the car is still sold at auction but the balance due between the auction value of the car and the amount owed is a debt still owed by the original purchaser. The bank will then file a lawsuit for a "deficiency judgment" that gets the owed amount back from the person who secured the original loan. At this time the bank can take the money out of their savings account or garnish wages until the debt is paid in full.

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