Repo is short for repossessed, a term used when a lender takes back an item from the borrower when the borrower fails to make payments on the loan. This can be used for real estate, when a borrower fails to pay the mortgage, and also for vehicles, when a borrower fails to pay his auto loan. These bank repo cars are usually put on sale or put in repo car auctions.

Bank repo cars can really vary in condition depending on how well the previous owner has taken care of it. Reasons for repossession can be bankruptcy, calamity, divorce, unemployment, or any number of other things. Former owners can range from employees to businessmen to housewives to college students. There are also of course a wide variety of vehicles repossessed, such as compacts, SUVs, luxury cars, even family cars.

Since these cars come from owners from all walks of life, it is important you acquire adequate knowledge on the car's condition prior to purchasing one. It is best if you can have a mechanic help you out, especially if you aren’t real knowledgeable about a car’s engine, drive train, electrical system, suspension, etc. It is also a good idea to learn the ins and outs of auctions if that’s where you plan on purchasing it.

Banks do not want to keep used cars in their inventory and are, therefore, more than happy to dispose of them, even at rock bottom prices. They are usually sold through a bank repo car auction. But be sure to do your due diligence. Bank repo cars are sold "as is" so you cannot complain or demand a refund if you end up with a damaged car or a lemon.

You may want to consider other types of car auctions as well. The federal, state, and local governments hold auctions for government-owned vehicles and those that have been seized from lawbreakers. You can often find great deals at them too.

In any case, it is wise to do intensive research before you purchase any car. And of course a brand new one would be nice, but you can often find a great deal on a car in excellent shape if you look at bank repo cars instead.