Tips on Buying Repossessed Cars in the Philippines

Are you considering the unique opportunity of buying a repossessed car? Whether you're a first-time car buyer or looking for a budget-friendly option, this checklist will guide you through the process of what to inspect, expect, and prepare when buying a used car.

So, What is a Repossessed Car?

A repossessed car, commonly referred to as a "repo car," is a vehicle that has been taken back by a bank or financial institution from the original owner. Repossession typically happens when a car loan borrower defaults on their loan, resulting in the lender reclaiming the car as collateral to recover the outstanding debt.

Once repossessed, these cars are often resold by the lender to recoup their losses. These repossessed cars for sale are frequently sold at prices below their market value, making them an attractive option for buyers seeking affordable and reliable vehicles.

The Difference in Buying a Repo Car and a Brand-New Car

The decision between buying a repossessed car and a brand-new car hinges on varying factors. Since repo cars are often priced below market value, they’re appealing if you’re a budget-conscious buyer seeking cost savings. Since these cars have experienced some depreciation, you can avoid the steepest part of a new vehicle’s depreciation curve. Plus, the buying process can involve auctions or dealership sales––which can be favorable to you in terms of having more negotiation power.

On the other hand, brand-new cars offer pristine car conditions, customization options, and manufacturer warranties with their vehicle packages. The purchase requirements are typically straightforward, without having to bid or do extra inspections on the vehicle. Of course, this entails that new cars come with a higher price tag, and can experience rapid initial depreciation.

Overall, the choice between repossessed and brand-new cars depends on your priorities, budget constraints, and the willingness to navigate the complexities of buying used cars.

What to Check When Buying a Second-Hand Car 

In case you want to jump into the process of buying a repo car, there are a few things you want to keep in mind before car shopping. Typically, buying a repossessed vehicle has a few more extra steps than buying a brand-new car. To help you out, here’s a list of tips to guide you through the purchase:

1. Research and Educate Yourself 

Before jumping the gun on shopping for repossessed cars, you have to understand the unique aspects of these vehicles. Research local regulations, market trends, and the specific processes involved in purchasing a repossessed car from varying sellers. Some cars depreciate more than others, some can be too old or worn down, and some loan institutions may have complex processes.

It’s important to check for these details before canvassing cars to ensure a more efficient and convenient car-buying experience.

2. Budget Planning 

Establish a realistic budget for your repossessed car purchase. Consider both the listing or auction price and the additional costs such as taxes, registration fees, and potential repairs. Having a clear budget in mind guarantees that you make financially sound decisions and avoid overextending yourself during the buying process.

3. Vehicle Inspection 

Thoroughly inspect the repossessed car you are interested in. Usually, sellers let you go to their warehouses to inspect the car. All you need to do is schedule a visit with them.

Once you’re in the warehouse, examine both the exterior and interior of the vehicle, and if possible, take it for a test drive. Look for any signs of damage, wear and tear, or mechanical issues. Bringing along a car-savvy friend or a trusted mechanic can provide valuable insights and ensure that you don't overlook potential problems.

4. Know the Market Value

Research and compare the market value of the repossessed car you are interested in with similar models in the market. This step ensures that you are getting a fair deal during the bidding or purchasing process.

5. Financing Options

Understand the financing options available for repossessed cars. Unlike brand-new cars, financing options for repo cars can differ, and you might need to explore traditional avenues such as bank loans or specialized financing options provided by institutions selling repossessed cars.

RCBC Auto Loan, for instance, offers tailored financing options for repossessed cars, making it more convenient for buyers to acquire their desired vehicles. Whether it’s a brand-new or repossessed car, RCBC’s car loan options offer flexibility for their customers.

6. Check Ownership and Documentation 

Verify the ownership of the repo car and ensure that all necessary documentation is in order. Request the vehicle's history report, check for any outstanding liens, and make sure the seller can provide clear and legal ownership transfer documents. By doing so, you avoid potential legal complications and ensure a smooth transition of ownership.

Buying a repossessed car requires meticulous planning, research, and attention to detail. By following these tips on buying repossessed cars in the Philippines, you can confidently navigate through the process, ensuring that you make an informed decision and acquire a reliable and affordable vehicle.

RCBC, with its commitment to transparency and tailored financing options, stands as a reliable partner in your journey to owning a repossessed car in the Philippines. RCBC’s cars for sale are tied with our auto loan packages, offering more financing options in case you want to buy our repo cars.

So, buckle up and get ready to hit the road with your dream car!