Aug 17th, 2010 | Written by scotty | Posted in Automotive |

Most bank repossessed cars are sold at large auctions of repo vehicles. It can be tempting to assume that just because they are sold at auction, the cars will go for so much less than their value that all of them are a good idea and can be sold right away for a profit. Unfortunately, that is not always the case.

Some of the repossessed cars are in such poor condition they are really only worth the price of certain parts and have very little resell value. Others will be so popular at the auction that they are likely to go much higher than their trade-in value. They may sell at their retail price or even more if someone is willing to bid that much.

It is important to have a good idea of both the trade-in and market value of any car you are planning on bidding on. Make sure you have a predetermined maximum bid for each one. A basic rule is to use the trade-in value for the condition it is in minus the cost of repairs or just 10-15% for an estimate of what it will cost to fix-it up. Cautious bidders often subtract an additional 5-10% for anything they missed.

Once the bidding starts, note how many people bid at the beginning. A lot of interest right at the start, usually means the price will go higher. When you are ready to join in, go ahead and bid. Since the auctioneer usually sets the next bid amount, you will be somewhat limited in the exact amount you bid, especially early on.

Remember to stop bidding when the price goes over your maximum. Keeping yourself from continuing to bid is the key to not overpaying. Also, avoid a bidding war when you and another bidder deliberately try to outbid one another time and time again. This usually ends up getting emotional and leads to overbidding on a car that isn’t worth that much.

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