Initial Research and Preparation
Before even setting foot near a repossessed car, thorough research is paramount. This involves understanding the market value of similar vehicles, identifying potential sources for repossessed cars, and gathering essential tools for inspection. 1. **Determine Market Value:** Use online resources like Kelley Blue Book (KBB), Edmunds, and NADAguides to determine the fair market value of the car you're interested in. Consider the year, make, model, mileage, and condition of comparable vehicles. This benchmark will help you assess whether the repossessed car is truly a good deal. 2. **Identify Sources for Repossessed Cars:** Repossessed cars are typically sold through auctions, dealerships specializing in repossessed vehicles, or directly by lending institutions. Common sources include: * **Auctions:** Bank auctions, government auctions, and private auctions often feature repossessed cars. Research auction schedules and requirements in your area. * **Dealerships:** Some dealerships specialize in selling repossessed vehicles. These dealerships may offer warranties or guarantees, but prices might be higher than at auctions. * **Lending Institutions:** Banks and credit unions sometimes sell repossessed cars directly to the public. Contact local lending institutions to inquire about their inventory. 3. **Gather Inspection Tools:** Prepare a toolkit for your inspection. Essential items include: * **Flashlight:** To inspect dark areas, such as under the hood and inside the cabin. * **Tire Pressure Gauge:** To check tire pressure and identify potential tire issues. * **Tire Tread Depth Gauge:** To assess tire wear and remaining tread depth. * **Notebook and Pen:** To record your observations and take notes. * **Camera or Smartphone:** To document any damage or issues you find. * **OBD-II Scanner (Optional):** To check for diagnostic trouble codes (DTCs) that may indicate underlying mechanical problems. Note that using an OBD-II scanner at an auction might not be allowed. * **Magnet (Optional):** To check for body filler, which indicates previous accident repairs.
Exterior Inspection
A thorough exterior inspection is crucial for identifying any visible damage, rust, or signs of previous accidents. Examine the car systematically, starting from the front and working your way around. 1. **Body Panels:** * **Check for Dents and Scratches:** Carefully inspect each body panel for dents, scratches, and other imperfections. Note the size and location of any damage. * **Look for Mismatched Paint:** Mismatched paint can indicate that a panel has been repainted due to accident damage. Check for variations in color and texture. * **Inspect Panel Alignment:** Examine the gaps between body panels. Uneven gaps can suggest previous accident repairs or poor workmanship. * **Check for Rust:** Pay close attention to areas prone to rust, such as the wheel wells, rocker panels, and around the edges of the doors and trunk. Look for bubbling paint or visible rust. * **Use a Magnet (Optional):** If you suspect body filler, use a magnet to check the panels. A magnet will not stick to areas with body filler. 2. **Glass and Lights:** * **Inspect Windshield and Windows:** Check for cracks, chips, and scratches in the windshield and windows. Even small cracks can spread over time. * **Test All Lights:** Ensure that all lights are working properly, including headlights, taillights, brake lights, turn signals, and hazard lights. Have someone help you check the brake lights. 3. **Tires and Wheels:** * **Check Tire Condition:** Inspect the tires for wear and tear. Look for uneven wear patterns, which can indicate alignment issues or suspension problems. * **Measure Tire Tread Depth:** Use a tire tread depth gauge to measure the remaining tread depth. The minimum legal tread depth is typically 2/32 of an inch. Replace tires if they are worn below this level. * **Check Tire Pressure:** Use a tire pressure gauge to check the tire pressure. Inflate the tires to the recommended pressure listed on the tire placard (usually located on the driver's side doorjamb). * **Inspect Wheels:** Check the wheels for damage, such as dents, cracks, or corrosion. Ensure that the wheels are securely attached and that the lug nuts are not stripped. 4. **Undercarriage:** * **Look for Rust and Damage:** Use a flashlight to inspect the undercarriage for rust, damage, and leaks. Pay close attention to the exhaust system, suspension components, and fuel lines. * **Check for Fluid Leaks:** Look for signs of fluid leaks, such as oil, coolant, or transmission fluid. Note the location and color of any leaks.
Interior Inspection
The interior inspection focuses on the condition of the seats, dashboard, electronics, and other interior components. A well-maintained interior can be an indicator of how well the car was cared for overall. 1. **Seats and Upholstery:** * **Check for Tears and Stains:** Inspect the seats and upholstery for tears, stains, and excessive wear. Note the location and severity of any damage. * **Test Seat Adjustments:** Ensure that all seat adjustments are working properly, including the seat position, lumbar support, and headrest. 2. **Dashboard and Controls:** * **Inspect Dashboard for Cracks:** Check the dashboard for cracks, fading, and other signs of damage. Cracks can be caused by sun exposure or age. * **Test All Controls:** Test all controls, including the steering wheel controls, climate control system, radio, and infotainment system. Ensure that all buttons and knobs are functioning properly. 3. **Electronics:** * **Test Power Windows and Locks:** Ensure that all power windows and locks are working properly. Check the operation of the window switches and door lock actuators. * **Test Mirrors:** Check the operation of the side mirrors and rearview mirror. Ensure that the mirrors are properly adjusted and that the defogger (if equipped) is working. * **Test Windshield Wipers:** Test the windshield wipers and washer fluid. Ensure that the wipers are clearing the windshield effectively and that the washer fluid is spraying properly. 4. **Smell:** * **Check for Unusual Odors:** Be mindful of any unusual odors, such as mold, mildew, or smoke. These odors can indicate water damage, pest infestation, or previous smoking in the car. 5. **Check the Odometer:** * **Note the Mileage:** Record the mileage displayed on the odometer. Compare this mileage to the car's age and condition to assess whether it is reasonable. High mileage for a relatively new car may indicate heavy use.
Mechanical Inspection
The mechanical inspection is the most critical step in evaluating a repossessed car. It involves checking the engine, transmission, brakes, and other essential mechanical components. If possible, have a qualified mechanic perform a pre-purchase inspection. 1. **Engine Compartment:** * **Check Fluid Levels:** Check the levels of all fluids, including engine oil, coolant, brake fluid, power steering fluid, and transmission fluid. Low fluid levels can indicate leaks or other problems. * **Inspect for Leaks:** Look for signs of fluid leaks around the engine, transmission, and other components. Note the location and color of any leaks. * **Check Belts and Hoses:** Inspect the belts and hoses for cracks, wear, and damage. Replace any belts or hoses that are in poor condition. * **Check Battery:** Inspect the battery for corrosion and damage. Ensure that the battery terminals are clean and secure. 2. **Engine Operation:** * **Start the Engine:** Start the engine and listen for any unusual noises, such as knocking, ticking, or hissing. These noises can indicate engine problems. * **Check for Smoke:** Observe the exhaust for smoke. Blue smoke can indicate burning oil, while white smoke can indicate a coolant leak. * **Monitor Engine Temperature:** Monitor the engine temperature gauge to ensure that the engine is not overheating. 3. **Transmission:** * **Check Transmission Fluid:** Check the transmission fluid level and condition. The fluid should be pink or red and should not smell burnt. * **Test Shifting:** Shift the transmission through all gears (if possible) and listen for any unusual noises or slipping. Ensure that the transmission shifts smoothly and without hesitation. 4. **Brakes:** * **Check Brake Pads and Rotors:** Inspect the brake pads and rotors for wear and damage. Replace any brake components that are worn below the minimum thickness. * **Test Brakes:** Test the brakes by applying them firmly at low speeds. Ensure that the brakes are responsive and that the car stops straight without pulling to one side. * **Check Brake Lines:** Inspect the brake lines for leaks and corrosion. Replace any brake lines that are in poor condition. 5. **Suspension:** * **Check Shocks and Struts:** Inspect the shocks and struts for leaks and damage. Replace any shocks or struts that are leaking or worn. * **Bounce Test:** Perform a bounce test by pushing down on each corner of the car. The car should rebound smoothly and without excessive bouncing. 6. **Exhaust System:** * **Check for Leaks:** Inspect the exhaust system for leaks and damage. Listen for any unusual noises, such as hissing or rattling. * **Check for Corrosion:** Look for signs of corrosion on the exhaust pipes and muffler. Replace any exhaust components that are severely corroded.
Test Drive
A test drive is essential for evaluating the car's performance and handling. Pay attention to how the car feels, sounds, and responds to your inputs. 1. **Starting and Idling:** * **Start the Engine:** Start the engine and let it idle for a few minutes. Listen for any unusual noises or vibrations. * **Check for Smooth Idling:** Ensure that the engine idles smoothly and without stalling. 2. **Acceleration and Handling:** * **Accelerate Smoothly:** Accelerate smoothly from a stop and observe how the car responds. Ensure that the engine accelerates without hesitation or stumbling. * **Test Steering:** Test the steering by making gentle turns at low speeds. Ensure that the steering is responsive and that the car does not pull to one side. * **Check for Vibration:** Check for any unusual vibrations in the steering wheel or seats. Vibrations can indicate alignment issues or suspension problems. 3. **Braking:** * **Test Brakes at Different Speeds:** Test the brakes at different speeds and observe how the car stops. Ensure that the brakes are responsive and that the car stops straight without pulling to one side. * **Listen for Brake Noise:** Listen for any unusual noises, such as squealing or grinding, when applying the brakes. These noises can indicate worn brake pads or rotors. 4. **Transmission Performance:** * **Test Shifting Through All Gears:** Test the shifting through all gears (if possible) and listen for any unusual noises or slipping. Ensure that the transmission shifts smoothly and without hesitation. * **Check for Overdrive:** If the car has overdrive, test its operation. Ensure that the overdrive engages and disengages smoothly. 5. **Listen for Unusual Noises:** * **Listen for Engine Noises:** Listen for any unusual noises coming from the engine, such as knocking, ticking, or hissing. * **Listen for Suspension Noises:** Listen for any unusual noises coming from the suspension, such as clunking or squeaking. * **Listen for Exhaust Noises:** Listen for any unusual noises coming from the exhaust system, such as hissing or rattling.
Reviewing Vehicle History Reports
Obtaining a vehicle history report is a crucial step in understanding the car's past. Services like Carfax and AutoCheck provide detailed information about the car's ownership history, accident history, and maintenance records. 1. **Obtain a Vehicle History Report:** * **Use the VIN:** Obtain the car's Vehicle Identification Number (VIN) and use it to purchase a vehicle history report from Carfax or AutoCheck. * **Check for Accidents:** Review the report for any reported accidents, including the severity of the damage and the date of the accident. * **Check for Title Issues:** Check for any title issues, such as salvage titles, flood damage, or odometer discrepancies. * **Review Ownership History:** Review the ownership history to see how many previous owners the car has had and where it has been registered. * **Check for Maintenance Records:** Check for any available maintenance records, such as oil changes, repairs, and inspections. 2. **Interpreting the Report:** * **Accident History:** A history of accidents can indicate potential structural damage or hidden problems. Consider the severity of the accidents and whether the car was properly repaired. * **Title Issues:** A salvage title indicates that the car was declared a total loss by an insurance company. Flood damage can cause extensive corrosion and electrical problems. Odometer discrepancies can indicate that the odometer has been tampered with. * **Ownership History:** A car with multiple previous owners may have been poorly maintained or driven extensively. A car that has been registered in a different state may have been exposed to different weather conditions or road conditions. * **Maintenance Records:** Consistent maintenance records indicate that the car has been well-cared for. Lack of maintenance records can be a red flag.
Negotiating the Price
After completing the inspection and reviewing the vehicle history report, you'll have a better understanding of the car's condition and value. Use this information to negotiate the price with the seller. 1. **Determine Your Offer:** * **Consider the Car's Condition:** Factor in any damage, repairs, or maintenance that the car needs. Use this information to justify a lower offer. * **Consider Market Value:** Use the market value of similar vehicles as a benchmark for your offer. Be prepared to walk away if the seller is unwilling to negotiate. 2. **Negotiate with Confidence:** * **Be Prepared to Walk Away:** Be prepared to walk away from the deal if the seller is unwilling to meet your price. There are always other repossessed cars available. * **Highlight Any Issues:** Point out any issues you found during the inspection to justify your offer. Be specific and provide evidence, such as photos or repair estimates. * **Be Respectful:** Be respectful and professional throughout the negotiation process. Avoid getting emotional or making personal attacks. 3. **Get a Written Agreement:** * **Document the Agreed-Upon Price:** Once you and the seller have agreed on a price, get it in writing. This will protect you in case of any disputes later on. * **Review the Agreement Carefully:** Review the agreement carefully before signing it. Make sure that all terms and conditions are clear and that you understand your rights and obligations.
Securing Financing and Insurance
Before finalizing the purchase, secure financing and insurance for the repossessed car. Compare rates from multiple lenders and insurance providers to get the best deal. 1. **Securing Financing:** * **Check Your Credit Score:** Check your credit score before applying for financing. A good credit score will help you qualify for a lower interest rate. * **Shop Around for Loans:** Shop around for loans from multiple lenders, such as banks, credit unions, and online lenders. Compare interest rates, loan terms, and fees. * **Get Pre-Approved:** Get pre-approved for a loan before you start shopping for a car. This will give you a better idea of how much you can afford. 2. **Obtaining Insurance:** * **Get Quotes from Multiple Providers:** Get quotes from multiple insurance providers. Compare coverage options, premiums, and deductibles. * **Choose the Right Coverage:** Choose the right coverage for your needs. Consider liability coverage, collision coverage, and comprehensive coverage. * **Review the Policy Carefully:** Review the insurance policy carefully before signing it. Make sure that all terms and conditions are clear and that you understand your rights and obligations.
Finalizing the Purchase
Once you've secured financing and insurance, you can finalize the purchase of the repossessed car. This involves completing the paperwork, paying the purchase price, and taking possession of the vehicle. 1. **Review the Paperwork:** * **Read All Documents Carefully:** Read all documents carefully before signing them. Make sure that you understand all terms and conditions. * **Check for Errors:** Check for any errors in the paperwork, such as incorrect VIN, mileage, or purchase price. 2. **Pay the Purchase Price:** * **Arrange Payment:** Arrange payment according to the seller's instructions. This may involve a cashier's check, wire transfer, or financing. * **Get a Receipt:** Get a receipt for your payment. This will serve as proof of purchase. 3. **Take Possession of the Vehicle:** * **Inspect the Vehicle One Last Time:** Inspect the vehicle one last time before taking possession. Make sure that it is in the condition that you expected. * **Obtain the Keys and Title:** Obtain the keys and title to the vehicle. The title is proof of ownership. * **Transfer the Title:** Transfer the title to your name at your local Department of Motor Vehicles (DMV). 4. **Post-Purchase Inspection:** * **Have a Mechanic Inspect the Car:** Even after your initial inspection, it's wise to have a trusted mechanic give the car a thorough post-purchase inspection. This can uncover any hidden issues that weren't apparent during the initial inspection. * **Address Any Issues Promptly:** Address any issues promptly to prevent them from becoming more serious problems.