Most of us have seen movies or TV shows in which cars—often fancy ones—are seized from drug dealers and other criminals. And we’ve heard rumors about how those cars are auctioned off. (That is, when Crockett and Tubbs types don’t end up driving them as part of their cover in vice!) But how does buying a seized car really work? Are there really great deals to be had on exotic cars? And if you’ve ever thought about buying a seized or repossessed car, what do you need to know?
How it works
So how do these cars make it to auction?
Police departments impound a lot of cars each year. Some of them are the drug-seized cars we all hear about, but a lot of the stories (and the cars) are actually a lot more ordinary. Cars are impounded all the time for things like DUI, reckless driving, and even unpaid parking tickets.
After a car is impounded, it’s towed to an impound lot. Impound lots often charge high fees for each day that the car is there, and often the car’s owner can’t afford to get it out. If they’ve been arrested or hospitalized, they may be unable to pick it up for days or weeks. So the car goes unclaimed, and after the owner officially surrenders it, or doesn’t pick it up within a certain amount of time.
It works similarly for cars that have been repossessed. They’re considered forfeited if the owner can’t make the backlog of payments (plus repossession fees). The lender can then sell the car at auction.
Are prices really that good?
While sometimes the cars are exotic, like Ferraris and Lamborghinis, the majority of them are much more run-of-the mill, like Camrys and Civics. And when an exotic car is auctioned, prices tend to be very high, just like you’d find if you shopped for that car through other channels. Some of the auctions are held entirely online. Others allow online bidding ahead of the live auction, and the prices usually reach close to, or over, market value.
A recent auction included a rare Dodge Challenger Demon, which sold for over $130,000, and a Bentley that sold for $120,000. Neither of those prices were what you’d exactly call a bargain for either of those cars; they were in line with what you’d pay buying them elsewhere. And elsewhere, of course, is considerably less risky, because you usually have the opportunity to drive and inspect the car.
Buying a seized car: what are the risks?
One of the problems with buying a car at auction is that you have no idea of its history, and there’s no inspection of any kind. You do have to buy it ‘as-is’, so without the opportunity to have it inspected or even drive it before buying.
Additionally—and this is probably a rare case—but if you buy a distinctive or exotic car, it’s possible that it could have a nefarious history. And do you really want to be driving around in a drug dealer’s car, and potentially be mistaken for them?
The bottom line is that buying auctioned cars is a high-risk business. And the prices aren’t usually any better than buying through much safer, regular car sites like TRED. So unless you’re a mechanic, and are prepared to make costly repairs if you need to, it’s probably best to avoid buying seized or repossessed cars.