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Where do Repossessed Cars Go?

By Mike Richards Updated: 09/17/2019 Posted: 09/09/2019

Where do repossessed cars go? How can I buy a repossessed car? Who sells repo cars? Are repo cars a good buy? Let’s take a look at these vehicles, and how the process works.

If you got financing to buy your car, you don’t fully own it. There are terms and conditions you need to comply with when it comes to payments. The lender retains the right to repossess the car if  you miss payments.

When requesting for auto financing, you need to understand what happens when you fail to meet your auto payments. Some lenders send warnings of possible repossessions, while others repossess the car when you miss several payments.

It is crucial to note that repossession is not just about you losing your vehicle. This will have an impact on your credit score. The repossession will be on your credit report for seven years. If, however, you truly cannot afford to meet your payments, your car will be repossessed.

used car lot

If your financial challenges are temporary, it is always best to meet your lenders before you default on payments. Some creditors are flexible and may reconsider the payment terms if they feel you deserve the chance to keep your car. However, if the lender worries that you may not make the payments, they may choose to repossess.

Third-Party Storage Facilities

Lenders, like banks, do not always manage the repossession of the cars themselves. Most seek the services of third-parties. There are repo companies specializing in managing the repossession and storage of vehicles. In some cases, the lenders use third-parties to repossess the cars but choose to handle storage.

When the bank repossesses your car, it first keeps it in storage before putting it up for sale. Most lenders prefer giving their clients the chance to make payments and take back the cars. It is best to find out how long the banks intend to keep your car before selling it. Besides the fees you missed, the lenders will expect you also to cover the repossession costs.

Further Reading


If you fail to reclaim your car within the stipulated period, the lenders will put it up for sale. Some lenders sell to dealers of used cars, while others organize auctions where private sellers are welcome to place a bid. These auctions are often accessible online, through platforms like Auto Auction Mall. Lenders usually try to recoup their money without making losses. However, this is not always the case. Sometimes the lender sells the repo cars at very low prices so as to recover at least part of the value.

Car Auction

If the bank expects to make $8000 for your car, but instead sells it for $5000, the lenders will still endeavor to get the $3000 from you. The money you owe is known as a deficiency balance. The lender will try to get this payment from you. If that fails, you may be sued. However, the lender is responsible for attempting to sell the car at a reasonable market price. If the deficiency balance is too high, you may choose to appeal.

You should be allowed to attend the auction and place a bid, if you opt to recover your car at a time when it has been released for auction. If your bid is the best but still leaves a deficiency balance, you will still be required to pay it, including the repossession fees.

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