We are two recovery professionals who service areas on opposite sides of the United States. Our collective experience in the recovery industry is over 40 years and we have both experienced the peaks and valleys that are indigenous to the recovery industry. Our paths have only crossed briefly at various industry events over the years; we are aligned only by our desire to see the industry thrive and embrace the positive changes that will sustain our industry in the years to come.
One of the most significant changes in recent years has been the introduction of license plate recognition (LPR) technology. While many have fully embraced the technology and have seen positive results, others view LPR as a disruptive way to extend the reach of automotive lenders and forwarding companies. At the very least, the topic has stirred up spirited conversations within the industry!Seemingly benign choices regarding the technology platform or business model made by an independent business owner are no longer free from outside speculation or criticism as the use of this technology has become a divisive subject among recovery professionals.
Independently, we have evaluated the products and services provided to the industry by the current suppliers of LPR technology; asking the tough questions, using two systems simultaneously to gauge results, considering the development of our own LPR system, and even dropping one vendor for a brief period of time before returning back to their network. Today, collaboratively, we want to provide our industry colleagues with a factual, candid, and concise assessment of our experience with LPR in hopes that it may clear the air, dispel some of the myths surrounding both the use of the technology and those who provide it.
As the owner of Accurate Adjustments Inc., I chose to implement DRN’s LPR technology in May 2010. In the first month we increased both our repossessions and revenue by approximately19%.We ran the cameras for approximately the following six months generating a range of results. Working through technical issues and defining the best way to maximize the value of the technology was both an educational and frustrating experience. Admittedly, we were uncertain if DRN and their technology could support our needs. We discussed our options with DRN and chose to return the cameras. During the following months, other systems and options were considered without success. In the spring of 2011, we returned to the DRN network with a renewed sense of purpose and optimism. By August 2011, we wereagain experiencing similar increasesin bothrevenue and repossessions.
As with life, you get back what you put in. The results we have achieved are a true reflection of the work we put in to earn them – Were the cameras run consistently and in optimal locations and times? Were the resources and tools available to us fully utilized? Were we willing to work through the growing pains?While I do not have intricate knowledge of the inner workings ofother systems, I did make inquiries prior to making the decision to go with DRN, twice, and have the pros and cons documented from thisresearch. To summarize my findings, other systems are more of a “take it or leave it” business deal with minimal to no flexibility. Most everything asked of DRN was offered or provided, so it was a no brainer for our agency. No flip of the coin was needed. It is a fair assessment that the DRN cameras are worth the investment.
As the owner of Elite Collateral Recovery Inc., the stats provided by Accurate Adjustments Inc. are right on track with the data our agency has collected.We rana thorough comparison of the DRN LPR platform with another LPR provider for a period of six months. By any objective measure, the results were extremely one-sided. On average, DRN’s system has produced 20 repossessions per month compared to 1.5 with the other system.
Another significant differentiator is the costs associated with both systems and the impact this has on the money you are able to earn. With DRN, recovering an average of 20 cars at an average rate $315 per repossession, I would be able to bill a total of $6,300 per month. Add to this the $1,800 I receive in revenue share for purchased hits. Divide this total by 20 and my average gain per recovery increases to $405. Taking this a step further and adding an $85.00 locksmith fee to only 50% of these recoveries (10 cars) and a $100.00 auction fee to all 20 will bring my average yield to $440.00 per recovery. This applies to only the live hits and does not take into consideration the several historical accounts we are able to more efficiently recover because we do not waste fuel and man-hours running different addresses.
Other vendors claim to fame is that more is paid per repossession than any other lender or LPR provider. But do they really? While you may currently earn more for the recovery, it is important to remember that it includes the transportation to auction within 50 miles. With my transport fees starting at $85.00, that would leave my net proceeds at $315.00 or less. Our agency was also not prepared for the monthly fee in excess of $1,200 plus installation costs. We were never able to generate a monthly profit with this system and have since shelved the equipment.
Elite Collateral Recovery has been affiliated with DRN from the beginning and knew that LPR technology would revolutionize the way business is done in our industry. Like Accurate Adjustments Inc., we too experienced equipment and support issues and believe there is much room for improvement in these areas. Nonetheless, we do see signs of progress and the results we achieve are consistent with our efforts. We also spent a considerable amount of time with the other vendor’s team to work through technical issues so these problems are not unique to any one company. At the end of the day, as a businessman, my primary objective is to seek out cash-flow to keep my business functioning on a daily basis. The rule is simple – if it does not make you money, do not do it. If you make money and receive a return on your investment, why shouldn’t you utilize a platform that provides these results? LPR technology is here to stay and we all need to learn how to maximize it to your own model.
With this letter, we hope we have been able to provide an objective and genuine assessment of our experience with LPR technology. It has not always been a smooth and easy path, but most worthwhile endeavors rarely are. Thank you for the opportunity to share our thoughts with you in this forum. Please feel free to contact either one of us with your questions or comments.
Shane Freitas, President, Accurate Adjustments Inc
Max Pineiro, President/CEO, Elite Collateral Recovery Inc.
Elizabeth, New Jersey