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Buying a repossessed car can be a great way to save money. Unfortunately, we often miss this opportunity because our eyes are stuck on purchasing a new one. Even some are not aware of the existence of used cars and what they can benefit from it.

To help first-time bidders and newbies in auctions, we compiled everything you need to know on how to buy a used car. In addition, this guide will open your eyes to how repossessed cars and auctions work, so you’ll not miss any money-saving opportunities.

What are repossessed cars?

Repossessed cars came from the Bank’s auto loan borrowers who failed to fulfill their loan obligations. Others called it preloved cars or used cars. From the name itself, this means that these vehicles are only a few years old and often come with low mileage on the clock.

These cars are usually in good condition, but some may vary depending on how the previous owner takes care of them. To ensure good shape, you can visit their car showrooms for personal inspection.

Read more: What You Need to Know About Bank-Repossessed Cars

How to purchase a repossessed car?

Participating in an online auction is easier than you think. After a few simple steps, you might already be driving your new car. Here’s how to bid in used car auctions.

1. Choose your car

Auction sites have a list of used cars that you can view either physically in their showrooms or online. You can check the color, mileage, plate number, fuel, warehouse location, and unit’s initial price in the list. You can also download the car list, so you don’t need to check it one by one.

2. Make an offer or bid

Once you’ve finally chosen the car you wanted within your budget, you can start making your bid online. But, again, make sure that you bid above the minimum bid price to have a chance to win the unit. Ideally, we encourage customers to bid at least 20% higher than the minimum bid price to have a higher chance of winning.

If you want to bid for the same unit, you need to fill out the bid form again with a different offer amount. Understand that bidders’ offers with up to the first degree of consanguinity, including common-law spouses, shall be considered one offer. Accordingly, the Bank will capture only the highest offer. This is why we shouldn’t forget to read the purchasing mechanics to avoid any conflict in the future.

Read more: Tips in Increasing Your Chances to Win in Used Car Auctions

3. Wait for confirmation

Expect a confirmation email about your bid, including the bid and car details. Next, check out the cut-offs and announcement of bidding results. Know that whatever the bidding result is, you’ll receive a notification about it.

But don’t lose a chance if they reject you once. In some cases, the car will be awarded to the next highest bidder if the winner doesn’t accept the repossessed car upon inspection after few days.

4. Provide payment

Let’s say you won the bid. Remember when filling out the bid form, your payment option is a requirement, and you can either choose the cash or auto loan option. If the repossessed car was awarded to you through cash payment, you must pay the full payment within 2 banking days from the award notice.

For auto loan payments, you must submit requirements and pay the reservation deposit of ₱10,000 within 2 banking days from the award notice. Then, if there are no issues, you have another 10 banking days to submit a LOG to complete the transaction.

Note that all cars are sold on an “as is where is” basis, so you need to make your customer diligence checkup to the awarded car within 2 days before making full payment.

Should I buy a repossessed car?

We know we have many choices in getting a car, so why buy a repossessed car from an auction? Buying a car in auctions might not be for everyone, but it might be the perfect option for you if you’re looking into getting a great deal.

Choosing a repossessed car can give you up to 40% off from the brand new price. Don’t worry about its condition. Many repossessed cars are still in excellent shape. You’re also dealing with reputable institutions making sure that the cars are well taken care of after being repossessed.

As I’ve mentioned, most of the auction houses have a sold-as-is where is rules. So don’t think that they’re trying to cheat you; they only wanted to sell it as they got it as well. The best way is to have a mechanic person who can go with you during your inspection.