How Do I Sell A Reposessed Car?
Many people have asked themselves the following question: How do I sell a repossessed car? In the vast majority of the situations, the problem occurs when a lending institution will take the car back from the person that can afford the monthly payments. These repossessions have a great market potential for the car dealers as although they sell it a price level well below the actual market value, they still are able to make a small profit at the end of the day. For those of you that are interested in selling a repossessed car you should know that is not a simple task as there are a lot of issues to be taken into consideration. Not only there are legal issues to follow, but the entire process of purchasing repossessed cars, advertising them and commercializing them can be overwhelming for some people that are not used to commercial actions.
First of all, you must obtain a wholesaler’s license or a dealer’s license. It is obligatory to check the local state regulations for which level is necessary for purchasing and reselling repossessions. In addition, you must verify the lot and storage requirements and for some states, like South California for example, these automobile sales lots and facilities must be inspected for safety purposes, before you can actually open your business. For this reason, you must check the state requirements through your local DMV.
The second step you must accomplish is to find the cars that will feed your business. Be careful when choosing the cars you want to purchase as you need to think about their market value, the level of awareness as well as other aspects that define the concept of buying and selling an automobile. If by any chance you have a working relationship with several financial institutions, you can repossess the cars yourself as these institutions can act like a third party assignee to a lending institution. There are several auctions from which you have the possibility to purchase repossessed automobiles. You must give your business contact details to these lending institutions. It is advisable to participate in private sales events organized by banks which will invite only licensed deals that will bid on repossessed cars.
Once you have obtained a couple of repossessed vehicle, you must upload pictures of them on your business website to get the desired level of exposure. Next to the photos, attach full specifications of the car like make, model, year of fabrication as well as the features that are relevant to such a product. To increase the likelihood of selling the car, record a video of it, showing both the interior and exterior of it. If you can afford, hire a camera crew to film the automobile while you drive it around the city. It is recommended to show the engine of the car and record the sound made by it so that the potential buyer will have a more concrete condition of the vehicle.
In order to obtain the desired space for showcasing the cars, you must lease or purchase property. You have the possibility to rent that space for the entire year or only for special auction sales events. The cars must be washed and waxed so that they look good in front of the potential buyers. A cleaner and shinier car will be more attractive in comparison to a dusty one which looks obsolete. Do not forget to remove all of the personal belongings of the previous owner as it is illegal to sell their possessions.
The follow-up question to “how do I sell a repossessed car?” is “how to price it”? It should be done at a near fair market value, at least there are the indications given by the experts in the domain. Legally put, according to the Federal Trade Commission – FTC, “A creditor’s failure to resell your car in a commercially reasonable manner may give you a claim against that creditor for damages or a defense against a deficiency judgment.”
For all of the cars you plan on selling, you must list any available warranties or coverage. According to the book “Everybody’s Guide to the Law”, written by Melvin M. Belli and Allen P. Wilkinson, “federal law requires used-car dealers to place a window sticker on every used car indicating whether any warranties come with the car.
Remember to notify the original car owners that their vehicles are being put up for sale. In some states, you must notify them before putting the car for public sale. You must do so in order to allow them the opportunity to pay the money that they owe on the vehicle so that they can get it back.
It is advisable to organize a car auction prior to the moment when the newest automobiles are brought to the lot. The reason to do so is to give your potential buyers the feeling that they have the chance to get a deal before the rest. By doing so, there will be more quickly buying decisions which will allow a better flow of your inventory.
Without advertising, the chances of having a profitable business are very limited which is why it is recommended to hire a video production crew that will make you a few commercials. These promos will run on your local TV affiliate, increasing your exposure. Such commercials should be catchy, in order to attract the attention of many people, turning them into potential customers.
One last piece of advice is about negotiating the price. It is advisable to not be very strict when dealing with a customer, but at the same time establish a rock bottom price from which you will not go lower.
It goes without saying that you should allow your clients to test-drive the cars because doing so it will increase your chances of selling the vehicles. Once the test drive has ended, invite them to your office to start putting things on paper before someone else gets the car, simple yet effective.
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