Because repossessed vehicles can be bought at bargain prices on auction, you can buy repossessed vehicles and sell them for profit. In fact, many car dealerships do the same and you may have even bought a used vehicle that was sold on auction to the dealer without even knowing it!
What is a repossessed vehicle?
A repossessed vehicle is a used car that has been put into the ownership of the lending institution that financed it. This happens when the person who previously owned the car defaults on loan repayments, violates the terms of the agreement, or is no longer able to pay the monthly installments. When this happens, the lending institution is awarded a court order to repossess the vehicle into their possession and sell it to regain any money they have lost. These cars are usually sold on auction through auction houses such as Burchmore’s and Aucor. Auctions are held on a regular basis around the country.
What makes repossessed vehicles so cheap?
When it comes to selling off repossessed cars, banks and other lending institutions are more concerned with making up for any money lost than selling the car at a profit. This means that good quality cars often sell for far less than they are actually worth, depending on how much the previous owner still owes on the vehicle.
This gives you the opportunity to buy repossed vehicles and sell them for profit, as you pick up bargains on auction and sell them for a more book-worthy price.
How can I sell my vehicle for profit?
You can try trade in the vehicle at a dealership, as this is the most convenient way to sell the vehicle you have bought. However, the dealer will be essentially taking a portion of your profit and you may not even make much of a profit! Essentially, using a dealer is using a middle man; he provides the service for you of selling the car to a private buyer but he will not pay as much for your vehicle as a private buyer would.
The way to make the most profit on your purchase is to sell straight to the public. You can advertise the car for sale on community noticeboards, in newspapers and other publications, or online. The cheapest way to advertise can be by advertising your vehicle on online classifieds such as Gumtree –www.gumtree.co.za. On Gumtree, it is easy and quick to post an ad for free. You can include the vehicle details as well as your contact details and pictures. If you are selling a worthy vehicle at the right price, watch the offers roll in!
Hints and tips for buying on auction
- Especially of you plan on selling the vehicle for a profit, you need to ensure that you are actually getting a good deal. To do this it is essential to do your research about the vehicle you intend to buy.
- Before you attend the auction, study the list of cars that will be sold on that day. Look for what appears to be a good deal, then look up the prices being charged at dealerships for similar models. If the prices are significantly higher for similar cars sold at dealerships, the car may be worth buying to sell at a profit.
- Get to the auction early so that you can thoroughly inspect the car you are interested in buying. If you don’t know much about cards, bring along someone who does to help you check the care from top to toe to look for flaws or imperfections.
- You need to register with the auction house before you are allowed to bid on auction. You need to bring along a bank guaranteed cheque or credit card with you to pay the nonrefundable deposit required. Bring along some form of identification and check before the auction what the bidding requirements are for that particular company.