Are you in the market to purchase a car? Many people are afraid to make large purchases with the after-effects of the credit crunch still heavily impacting the market. Interestingly, however, this might actually be the best time to purchase a vehicle – the kinds of deals floating around these days will probably not be seen again for several decades, perhaps even longer.
This might seem counterintuitive. Why would it make sense to purchase a large consumer durable – such as an auto – during the economic climate we are currently living in? After all, the financial crisis was caused by over-spending and lack of thriftiness on the part of both consumers and lenders. The lenders made bad loans; the consumers willingly took these loans; and eventually, when the whole thing started to unravel, everyone suffered from the foolhardy spending habits of the North American consumer. So why would purchasing a car repo be a smart idea?
Well, everything written above is true. However, the rapidly deteriorating market had a very strong effect on prices, creating some once-in-a-lifetime bargains. Let us examine how this happened. It started, of course, with the home foreclosures – when consumers could not pay their mortgage note and became delinquent on their loans, banks were forced to seize their assets (that is, their house or car or whatever else of value they had). Of course, these assets were useless to the banks, and had to be sold. Resultantly, the market was flooded with cheap homes and cars being sold by banks at fire-sale prices.
A recent study that came out said that such severe economic recessions occur roughly once every fifty-five years. If this is true, and the next one will not be along for a while, then the cheap repo cars available right now will not be seen again for decades. And they will not last long; as the recovery slowly kicks in, prices are going back up. If you want to make the kind of investment that will pay off for years to come, then listen to your financial instinct and get a repossessed car today, while you still can.
