So You Wanna Own a Repo Company…

Guest Article

After numerous weekly phone calls and emails I have decided to answer this question once and for all to the best of my ability. Keep in mind this is only my OPINION.

There are many ways to get into the repo industry. Yet, once you get there, how do you succeed? My first piece of advice is, go work for another company. Find one in your area, use their truck, experience, insurance, bond, and their teaching. Learn how to go without sleep and how to work for 14-16 hours straight. The job is a fun one at times, while at other times you’ll want to shoot yourself for getting involved. Why, keep reading you’ll soon see. It’s not a job that you can do half way… it’s one that is all or nothing. TLC and other shows have made it look fun and somewhat glamorous with titles like “Stealing for a Living”. I have never stolen anything in my life. I recover what others are stealing from lien holders and financial lenders. If someone buys a car, signs a contract agreeing to pay for it, and then defaults, THEY ARE STEALING. Rethink your decision and if you are serious, contact a local repo agency and see if any of they need drivers helpers and go from there. For those of you who want to start your own repossession company rather than work for someone else, YOU obviously are gluten for punishment. Here’s what you have to look forward to………………..

 First and foremost, check with your state laws. Some states require licensing while others do not. Some states require a state bond while others do not. Some states do not allow “involuntary” repossessions (La. & Wisc.) while others simply have a no breach of peace law. In Florida and California, you’ll be required to be state licensed and take a repossession certification course. After all of that fun leg work is done, go price a truck. You will need at least one cab & chassis with a damage free repo lift of some sort. You will need to decide if you want a sneaker type that is hidden and not so noticeable (but limited in its abilities) or a specialty repo bed with is controlled by remote control and attaches to the vehicles tires for a quick grab & go without having to strap or chain. Regardless, you will have to get out of the truck to verify the VIN # of the car you are about to grab. Prices range from $55,000.00- $80,000.00 so you will need credit for a loan or a savings to invest. That’s the first of your monthly payments!

Now that you have decided on a truck, you’ll need both wrongful repossession on your company (at least 1 million) and commercial truck insurance for repo purposes on that wrecker . Now for one truck you are looking at roughly $800.00 per month premium with a down payment of roughly $3500.00 for wrongful repo ins. & commercial liability. So there’s some more money for you to spend out, and a monthly bill that will need to be paid. A dishonesty bond of at least 1 million is next. Usually the insurance companies who write wrongful repo ins. will also sell you your bond. The banks/finance companies require both the insurance and the bond. A 1 million dollar bond will run you roughly 600.00/year in addition to your insurance premium. Secured Lot for storing cars is also a must for the banks/finance companies. Some will actually visit and inspect your lot before signing up with your company. The insurance companies will also do an inspection so it has to be within their guidelines for them to insure it.

You will need at least a 6ft. fence, 3 strands of barbed wire at the top, a secure gate with a lock, must be well lit, and some form of a security system and video cameras is also recommended but not required. Finding one to rent is near impossible so you will either already own land or buy land for this expense! There’s another payment! Office- Each client will fax or email you your repossession assignments. You will need to rent/buy/build a small office and most of the companies who write repo insurance will NOT ALLOW A HOME OFFICE. The purpose of the office is to receive faxes, send out your updates on their accounts, keep your files secure, debtors personal property from their cars, daily forms such as condition reports, invoices, etc. When a client wants to reach you or someone in your office by phone they expect an answer not an answering machine or you on a cell on the road so you will need someone sitting by the phones during business hours.

Clients will call with additional information on debtors locations, place of employment, whatever they may need to advise your company of. In addition to this they will want information on accounts from your company on a daily basis so someone has to take those calls. There’s another expense for you! I saved the best for last, but I cannot stress the importance of it. Most cities have 50+ repossession companies. You will have to find clients. Some will be finance companies in your area, some will be banks 2000 miles away. Either way you have to approach these people, basically beg for their work, then prove to them that your company is more reliable than the guy who is offering to do the job cheaper than you. Keep in mind that IF you get their work you will be waiting anywhere from 30-60 days to even get paid for the repo work you do for them. Keep in mind that there are repo companies that will not have the overhead that you will have that can or will charge a cheaper price. You have to sell your self almost daily. Some of these cheaper companies will go away in a matter of time for obvious reasons, some have been around for 20 years and can simply operate cheaper than you. They aren’t going anywhere. YOU will have to make the decision, do you lower your price too or do you move on to another client who will pay what your company is worth. Whatever you decide, remember you are responsible for paying office rent/loan pymt., utilities, phone, lot rent/pymt., truck pymt., insurance & bond pymt. and most important……….YOUR SALARY TO ALSO PAY YOUR HOUSEHOLD BILLS!

Hopefully by now you will see why it is a better option to work for someone else and let them pay the bills until you are financially ready and well experienced. It is important to do some major research, be financially stable, have good credit, and be prepared to make major sacrifices OR THE REPOMAN WILL BE LURKING IN YOUR DRIVEWAY SOON! Exciting? Think Again!!!!!!

Dane Dino Petrovic Dino
Joppatowne, MD

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