Bargain sessions with repossessions!
What is a repossession and why does it mean good things for a bidder?
An auction that features repossessed assets can be a treasure trove for a bidder looking to get a high value item for a bargain! Just about anything can be repossessed so it’s definitely worth keeping an eye out for those items in our auctions.
But the real common area is repossessed vehicles and recreational assets, so if you’re on the look out for a new boat or jet ski this summer you’ll want to be on top of repossessions and how they work!
What is a repossession?
There are two different types of repossessed goods, commercial and private. Commercial repossessions are generally because of a business liquidation. Liquidations often happen when a business can’t pay its debts or bills. The company’s assets are now sold off in an attempt to pay the remaining debt or bills!
For example, if a business buys a car for $50,000 but now it’s only valued at $40,000 but they still owe the financier $45,000 it means there is no equity in the asset to repay further debts. The bank can take the car and sell it to try and get as much money back for it as possible.
If they only owed the bank $35,000 and there is equity it will be sold as a liquidation asset by a liquidator. They sell the car, pay the financier what they are owed and use the remaining money to pay further creditors.
The bank or a liquidator seize the assets, have them valued and sell them on behalf of the company. This is where we come in.
Repossessed Assets and Auctions
In many instances a valuation is conducted and then the goods are released to public auction. The same goes for the repossession of personal goods. If someone takes out a loan or finance in order to purchase an item and then can no longer afford to pay it off, the asset is seized, valued and sold at auction.
Repossessed goods are normally sold at the first auction as the financier is looking for an immediate return. Sometimes they will even go through completely unreserved!
Why buy repossessed assets?
Anything can be repossessed and sold through auction with us. We have had everything from gym gear right through to massive excavators! But most of the time it is assets like cars, motorbikes, boats and jet skis that get repossessed.
The assets are generally only a couple of years old as most people, including businesses, buy them brand new with a three to five year finance plan to pay it off. It can be as soon as six months when it becomes clear they cannot pay their bills and the asset gets repossessed.
The assets are also usually high value. Paying a purchase off through finance or a bank loan means people tend to afford the best of the best!
So basically, repossessed vehicles or liquidation assets are high value, low age and have to be sold. And in many cases, this means great savings for the bidders!
Keep your eyes peeled, particularly in our fortnightly Motorbike, Marine and Recreation auction for bikes, boats and jet skis labelled as repossessed. Our weekly Used Cars auction is a good one for repossessed cars!
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