Are you thinking about selling your car that you won at auction, but don't know how much a repossessed vehicle depreciates? Then let us help you understand more about this subject!

In today's post, we'll introduce you to the world of depreciation of repossessed vehicles so you can better understand the buying process. Check it out below!

First, to understand what it is and to truly determine the depreciation of a recovered vehicle, it's important to become familiar with the procedures involved in the process of buying vehicles at auction.

Well, vehicle auctions take place with the purpose of raising a minimum amount of money for the lots being offered.

In this sense, this means that the vehicles to be auctioned have a different origin than that of common new and used vehicles.

In all auctions, the auction notice must disclose in advance the origin of the lots that buyers will be bidding on. Therefore, these origins can vary even within the same auction.

This is the most desirable type of origin because, despite not having a warranty after purchase, the vehicles are generally brand new.

But what would lead a car manufacturer to auction off brand-new vehicles? The replacement of models and the consequent accumulation of vehicles in the yards.

When this happens, it ends up being more advantageous for the automaker to auction off its older vehicles, rather than leaving them exposed to the elements and unusable.

Well, banks and credit and financing companies can, by court order, recover assets financed through them to recover debts.

However, some of these vehicles may experience minor malfunctions. But don't worry! They shouldn't directly or indirectly compromise the vehicle's overall functionality.

Well, another purchase option that directly affects the depreciation of a recovered vehicle is related to public agencies.

In this sense, we understand that these are vehicles used in public services such as ambulances, patrol cars, vehicles serving the secretariats and departments of public institutions, among others.

When ordinary people use auction houses to sell their personal vehicles, the condition of the vehicle and its tax status at the time of the auction are the buyer's responsibility.

So here's a tip: visit the lot with a mechanic you trust to assess the vehicle and determine if you're getting a good deal.

In the case of vehicles originating from insurance companies, the depreciation of a recovered vehicle may be related to a history of claims. So, be aware!

Claims are maintenance history records registered through claims with insurance companies, i.e., coverage for collisions, thefts, accidents, rollovers, and similar incidents.

With this point clear, after checking the chassis number with a vehicle consultant, you will again be subject to the same situation as the auction condition for private individuals.

The insurance company is not responsible for the vehicle's tax status; therefore, before being transferred to the auctioneer, the vehicle was in the possession of one or more individuals who may or may not have settled any outstanding tax debts.

For the seizures, all vehicles auctioned here originated from theft or robbery and were seized by police inspection.

However, to compensate for potential difficulties after the purchase, auctioneers make up for it with attractive prices that are even more competitive than those of other types of auctions.

In the various auctions advertised on the internet, which can take place in person, online, or in a hybrid format, you will find diverse origins, and it is very important to distinguish between them in order to make a good deal.

Now that we know the various possible origins of an auction lot, we can define what a recovered vehicle is and understand the depreciation of a recovered vehicle.

Banks, credit providers, and others that use their clients' vehicles as collateral for their loans.

Thus, when an individual fails to meet their financial obligations to the company that owns the asset under contract, the company initiates legal action that results in the recovery of the asset.

However, the debtor offsets part of the debt acquired with the finance company with the value of the vehicle that was offered as collateral in the contract.

Since the finance company has no interest in using the vehicle, it will convert it into cash, passing the vehicle on to an auction house and setting a minimum bid price.

In this way, she recovers her financial loss and makes the auctioned vehicle available for circulation again, with the vehicle's documentation remaining the responsibility of the buyer.

In the case of insurance companies, a recovered vehicle is one that has been the result of an accident, meaning it has suffered moderate or significant damage.

The insurance company repairs the damaged vehicle so that it returns to partial or full functionality and can be returned to its owner.

However, if the vehicle does not meet the aesthetic or functional standards, whether full or partial, required in the contract with the client, the insurance company sometimes replaces the client's vehicle and resells the damaged vehicle via auction.

In this case, some vehicles may have minor cosmetic damage but be fully functional, or vice versa. Therefore, it is important to assess whether the low price of the vehicle at auction will actually offset the costs of its maintenance.

The depreciation of a recovered vehicle currently ranges from 30% to 45% above the FIPE table value. This indicates that the prices of a recovered vehicle are quite competitive for resale.

However, it's important to pay attention to the vehicle's current condition, as it may have been involved in an accident in the past. To resolve this doubt, simply consult your state's traffic authority and look up the chassis history.

Moreover, the vehicle's history will indicate the type of damage it sustained, whether minor, medium, or major. This information will be crucial for assessing the depreciation of the recovered vehicle!

So, as you can see, participating in a car auction can be a good deal. However, it's common to feel insecure in these situations. Therefore, here are some foolproof tips for making a good purchase!