FNB repossessed vehicle sales offer value for money on car brands and models. Repossessed vehicles are cars that ownership the bank has had to reclaim. Usually due to missed monthly payment instalments on vehicle finance.
Because of this First National Bank needs to make back the money owing on the vehicle and they auction the motor cars off at below their value price.
A statistic found stated that due to repossessions vehicles lose approximately 35% of their value. Therefore the banks in South Africa are losing a lot of money every time they repossess a car.
FNB Repossessed Vehicles Available
Although we are out of the recession there are still many cars being repossessed by FNB Bank in 2024. This is because of a number of factors.
One of the major factors is that people are buying well beyond their means as they now have 72 months in which to pay off the car. And think that they can afford the vehicle when they really cannot.
As a result, after six years of paying off the vehicle, they are still stuck with a balloon payment. That is more than what the car is now worth.
A balloon payment generally occurs when no deposit has been paid upfront for the vehicle. As you are no longer required to make a deposit on a vehicle.
In addition to this, the more expensive the car is, the more expensive it will be to insure and service it.
This further results in the owners not being able to trade in their cars for newer models. So as a result causes more and more vehicles to be taken by repossession.
Therefore if you are looking for a new personal vehicle or a fleet of vehicles, then FNB repossessed vehicle sales may be something worth considering for you.
You can buy brands such as Audi, Toyota, Mazda, and BMW. All at lower prices because of the fact that they have lost a large portion of their value when they were repossessed.
Why Are Bank Repossessed Cars Cheaper?
Bank repossessed cars are cheaper in price due to the following reasons…
Urgency to Sell: Banks in South Africa such as FNB are not in the business of selling cars. They’re in the business of lending money. When a borrower defaults on their car loan the bank’s primary goal is to recover as much of the outstanding debt as possible.
This urgency to sell quickly often leads to lower prices.
No Markup for Profit: Unlike traditional car dealerships banks don’t need to make a profit on the sale of repossessed cars. Their primary aim is to recoup the outstanding loan balance.
This absence of markup for profit means that repossessed cars are typically lower prices than their market value.
Auction Dynamics: Many repossessed cars are sold at auctions, where the bidding process can drive prices down. Especially if there are fewer interested buyers or if the condition of the car is not pristine.
This can result in buyers getting a good deal on a car.
Condition of the Vehicles: Repossessed cars may not always be in perfect condition. Some borrowers may have neglected maintenance or caused damage to the vehicle before it was repossessed.
Because of this banks may discount the price to reflect any necessary repairs or maintenance that the buyer may need to invest in.
Desire for Quick Turnaround: Banks want to sell repossessed cars quickly to recoup losses and free up storage space. This desire for a quick turnaround can lead to lower prices.
FNB Repossessed Vehicle Sales – Words of Caution
Do not buy beyond your means! As mentioned above this is one of the main reasons that cars are repossessed.
Many people would like to believe that in six years time they will be able to afford the balloon payment on the vehicle. Because they will be earning more, be more successful etc.
However a harsh reality of life is that this is mostly not the case. It is therefore important that you work out your budgets carefully. And that you do not spend more than you can.
So ignore the Ferrari on the showroom floor. That car is there for the same reason as to why you are opting for something cheaper.
The cars come as is. This means that should you purchase a vehicle at an FNB repossessed vehicle auction it is always imperative to take a qualified mechanic to inspect the car before you purchase.
Neither the banks nor the auction house are responsible for any problems that may occur once it has left the showroom floor. See if there is a vehicle that you can purchase that is still under warranty as this is the safest bet.
Try and gather up a deposit before you purchase. This way you will not be hit with a giant balloon payment at the end of any instalment period.
If you can afford to pay the car off over a shorter period of time, do so. Do not take an extended instalment period as this can cause problems in the future.
To Summarize
In summary buying a repossessed car from First National Bank in 2024 can be a worthwhile purchase if you are in the market for a new set of wheels.
Visit the bank auctions online and offline to see the repossessions available around South Africa.
In addition you can apply for car finance with FNB bank directly.
If you follow the tips above before bidding at the auctions and you will get a better deal when you buy your new car.