All in Repo Fee…The Kiss of Death of an Industry

GUEST REBUTTAL

By now we have all have seen multiple clients push for “The All in Repo Fee”. This magical number that encompasses all your services into one standard bill. Some with numbers higher than others of course, but no matter the number the results will all be the same.

First, why would this be a priority to a client? Well that answer is simple, the client can forecast with ease one hundred percent of the repo expenses tied directly to vehicles repoed. Secondly, this allows an accounting team to completely automate the payment process of vendor invoices. If every invoice is the set amount with all items included, then there doesn’t need to be any manager or staff approval for those invoices, they are approved instantly. Provide the service and the system pays.

This automation for the client is great for them as with that set number and increased automation they can reduce their staff expenses dramatically. Which we all know that the largest expense for any business is staff, so any reduction in work force through automation is always good for the bottom line.

Also there is the issue of staying out of the cross hairs of the CFPB and other government scrutiny. By controlling the ancillary fees through and all in method lenders can avoid potential of running afoul.

So as a client or lender how could you argue against this wonderful number? It checks all your boxes for good business, so for them it’s a no brainer.

However, for the agent it will ultimately lead to the death of the industry as we know it.

Before you roll your eyes as you read this let me explain. As an agency we do not just supply repossession services, we supply many other items that contribute to that repossession such as keys, storage, transport, skip tracing and so on. During the negotiation process each of these items have a specific number attached to them, the agent and client go down the list one by one and agree on fair pricing.

Now take all that service and negotiation and put into one bucket, one price that does it all. How easy is it now to negotiate terms on one number? Fast forward to the next negotiation, it is even easier to negotiate a smaller single number because the memory of value on previous service items has dissipated and is now reduced to zero sum. With every service you do from then on has no value attached to it, there is nothing to be competitive with except on a single price alone. The low-price scavengers that exist in every market will now be empowered which will ultimately result in faster dropping of fees. The ultimate race to the basement.

When that happens, that will be the beginning of the end.

Jeremy Cross