Editorial
$500 repo fee. Sounds pretty radical, doesn’t it? Well, really, it’s not. I imagine every one of us has had a father or grandfather who tells us how candy bars used to cost a nickel and gas was a quarter a gallon. Well, they’re usually telling the truth. These changes are reactionary to operational costs of living and operations and fall under a proven thing called (dig this) inflation.
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No forwarding companies haven’t “stolen” anything. It’s has been years since a bank would pay 500 for a normal repo. Agents have been trying for years to get the associations to join forces and I can’t see them ever getting together. When you talk to the companies at NARS insurance and the cost of trucks seem to be the biggest issues. Compliance and vetting are another concern. The forwarders came along when one agent would charge a bank 300 another 500 or more, the forwarders just leveled the playing field. The banks do not want to spend money on vetting all the repo companies keeping up with insurance, lot inspections plus, different pay plans. This is where VTS, RISC and CARS come into play. Banks are NOT paying forwarders 500 per repo, most are beating the forwarders down to 275-350 no mileage, no redemption fees, 15-20 days free storage and the list goes on. Forwarding companies insurance coverage is double that of a repo company, 3 million for a forwarding will get not get you in the door of a decent size lender. Face it, this is a cut throat business plain and simple.
Ken,
I agree with you. In order to join an association, many years ago, you needed to prove experience (minimum of 5 years), have solid references of existing clientele, go through a personal and corporate comprehensive background check, just to name a few.
There was a clear distinction between the professional operators and those non-professionals that posed a threat to consumers and lenders. That distinction does not exist today. There is no structured training other than the annual conventions where speakers are generally selected by their ability to speak, not build a business.
It is no secret that todays requirements is limited to affording the membership dues. This is what has caused the unbalanced competition. Every association, in this industry, pounds their chest telling clients how professional and compliant their entire network is. But is it? I can assure you that many are not professional or compliant. Working account at rates lower than they were 40 years ago can only be accomplished by cutting corners and elevating the risk to a lender.
The only way to start to reverse the damage that has been done is by establishing that distinction that once existed. The current model of the associations has been proven not to work and causing more negative than positive change.
Gerald,
1) The associations were what separated the hillbilly clown tow truck drivers that decided to start repoing cars from the professional recovery agencies,
2) every major finance company required membership in 1 of 4 national repo associations (state associations do not cut the mustard)
3) The associations set minimum standards of operations & procedures ….. they also include training on laws and insurance requirements
4) The associations were the “vetting” source who verified the legitimacy of the owners ….. checking net worth and criminal history ( now you pay some relative that created a vetting company as a side business)
THE ASSOCIATIONS WERE THE REASON WE NEVER NEEDED ANY OF THESE PEOPLE INJECTING THEMSELVES INTO OUR INDUSTRY AND FORCING US TO BUY THEIR SERVICES THAT WE DO NOT WANT.
I agree with Deb@MWA. Why are there 3 associations in such a small industry? What major changes, or even minor changes, have they made to help the industry? Are there any clients that require that you are a member? No. I wonder how many association members can even justify the expense. Am I missing something? What ever happened to The Corp? Did they ever do anything to help the industry? That was a joke. Can someone point out the value in any of the associations today? I’m all ears.
I think the associations should join together as one, and elect board members with some backbone who will fight for it’s members, a prevailing wage standard, and campaign to do away with contingency and other abusive practices. Back in the 90’s some very devoted individuals in our industry fought long and hard to bring professionalism and honor to our industry and won that battle (thank you Joe Taylor, Ray Crocker, Millard Land, Ron Brown, The Altes Family, George Badeen and many others), But it only lasted until the forwarding companies and big lender’s caused it all to come crashing right back down to a level of Repo Madness on an epic level. People are actually getting killed or injured over a vehicle. I was once proud of my profession, but now I just shake my head in disbelief at what it has become.
If everyone would stop working for the forwarding companies the industry could soon correct itself and become lucrative again. But we have to get rid of Johnny Six Guns and I don’t have an answer for that. Without their minions the forwarding companies would fail. I thought NARS was a step in the right direction for the battle of the minions, but something went awry when their guest speakers were the very clients that were abusing us, and the guy at the table next to me has a rap sheet nine pages long and now in prison for bank fraud.
Get rid of Johnny and the minions, and the forwarding companies will either have to pay a prevailing wage or get the hell out of Dodge. I vote for the latter!
Ken, you are dead on the money! I was, of course, referring to the agencies net payment. The lenders, always fans of outsourcing to reduce internal overhead, have outsourced their vendor management to reduce internal costs. The expense for this has been passed on to YOU in the form of flat rates.
The industry DOES normally payout a $500 repo fee to recovery vehicles. That is s standard price.
THE PROBLEM …… is that forwarding companies are the ones that get $500 per car not the people actually doing the work !!!!!!!!
Forwarding companies have “stolen” the work away from the “real” recovery agents. That is why the prices are still low for actually agents in a truck and for people that actually own trucks performing the day to day in the field work.
Forwarding companies have raised rates & lowered recovery ratios compared to 20 years ago. They are the single worst thing to happen to the industry and to the financial well being of any reputable agency owner.
The industry needs to tell them all that we do not want or need you to steal our money or push your way into our industry…… you are not wanted.