How To Buy a Credit Union Repo

Anywhere that there are Lenders making auto loans there will be Lenders managing repossessions. When loans are made, the loan approval process determines the exposure risk involved. Even the strictest underwriting standards cushion for some loss. When one of these loans defaults, the collateral securing the loan is repossessed.

In an economic condition where unemployment levels are high, lost jobs and reduced wages result in higher instances of repossession. Credit Unions are member owned and typically all options are exhausted before collateral is seized. Payments may be restructured through loan modifications, refinancing, principle reductions, etc., but if the circumstances are dire, repossession may be the only solution. Stories of sly repo men dragging cars out of driveways make for great TV, but the reality is that more often then not vehicles are voluntarily surrendered to the Credit Union by the members.

Lenders don’t want these cars. They make their money from interest on the loans, and the thought of repossession perhaps upsets them the most. Once they have these orphaned cars the only choice is to sell them to cover their losses. Larger Banks will ship bulk volumes of cars to “Dealer-Only” auctions where they are purchased and remarketed on used car dealer lots. Credit Unions on the other hand, tend to deal in smaller volumes and get better results from reselling these vehicles on their own. Rather than paying a dealer commission, Credit Unions will reduce the price to compensate, and in turn sell the vehicles quickly. Credit Unions will reserve a section of their websites to list available inventory.

If a consumer finds a vehicle they want to buy they can then deal directly with the Credit Union. Even though the prices are already low, Credit Unions will typically entertain all reasonable offers. If you think the price is too high, tell them why and they may work with you. Another benefit to buying directly from a C.U. is the financing. This is what C.U.’s do best. Ask about any special financing they may offer. If they can’t budge on price they may be able to reduce the interest rate.

C.U.’s do not sell the cars for profit, but that doesn’t mean they don’t want you to be happy with your purchase. Lenders would want nothing more than to retain you as a long-term loan customer. The cars are usually sold “as-is” so make sure you do your homework before you submit an offer. also has a “Useful Links” section that provides information to help you make an informed purchase. Buying a “Credit Union is both prudent and safe.