Unless you have a lot of money, when you get a car generally you will take out a loan on the car that you want to buy. This is no problem as long as things go well for you financially, but no one knows when things might go wrong and there might come a time where you find yourself in financial trouble. One of the things that might suffer is the loan on your car, if that happens, you might find yourself delinquent in paying your loan back. Usually when this happens, it’s unfortunate, but the lender will generally take the car back by repossessing it. This then will act as collateral on the loan. Laws are different in all states but generally the lender is then forced to sell your car at a car auction. You can, if you want to buy back the car through auction bidding.
In some states, it is required that before the lender put the car up for auction that they allow for the original owner to try to buy the car back. He can do this by finding a way to pay back all of the money that is still owed on the car loan. However, the person who had the car loan may also be required to pay for any money that it cost the lender to have it repossessed as well. If the person cannot do this, then the car will go on the auction block.
Once the lender has decided to put the car up for auction, the person who had the car originally will usually be sent some form of communication that their car is going to be auctioned off. This again gives the person who once had the car a chance to get back their car.
If you are one of these people, you need to make sure that before you go to the auction to try to get the car back that you get familiar with the rules of the auction. This means you need to find out if they require the bidders to a deposit down before he joins the auction to bit and if the bidder needs to pay for the item that same day.
If you win the car you will be required to give payment for the vehicle. Whether it is right on the spot, which is normal, or if it’s the next day. It depends upon the rules of the individual auction. It also may be required that it be only cash or in the form of a cashier’s check. Typically when a car is won in an auction there is no payment plans allowed so there is no sense in even trying to go for that. If you are the person that had the car originally, if you win the bid and get your car back, it is doubtful that the winning bid will be the money that was actually owed on the car and more than likely you will still be required to pay what is still left on the car.
Even if you don’t win the car at auction and buy it back, you will still be held accountable for whatever is left over on the original loan. After the payment is made for the winning bid, that will be subtracted from the total amount and whatever is left over is what you will have to pay back to the lender for the loan on the car. Just because the car is sold, does not dismiss any money that still might be left on the original loan.