You Want To Own A Repo Company
You want to own a repo company? After numerous weekly phone calls and emails, I have decided to answer this question finally 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 that you go work for another company. Find one in your area; use their truck, experience, insurance, bond, and learn from their experience and mistakes.
Ask them to help you get compliance trained and certified through one of the available compliance programs. If they refuse, contact a compliance company and arrange to take the course at your own expense. Compliance certification holds weight with your potential clients when you do start your own company. Compliance training should include either an online course or a classroom program. Personally, I recommend recovery Standard or the RSIG insurance groups class.
It is not a job that you can do half way... it is one that is all or nothing. Television 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 attempting to steal 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, not me or my employees. Rethink your decision and if you are still serious, contact a local repo agency and see if any of they need driver’s or helpers and go from there.
For those of you who want to start your own repossession company rather than work for someone else, here is what you have to look forward to....................
A) 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 self-help repossessions while others simply have self- help repossession/ no breach of peace law. Some states require a right to cure legal letter be mailed to the debtor 10 or 20 days before the car can be legally repossessed. In Florida, Illinois and California, you will be required to be state licensed and take a state approved repossession certification course.
B) After all of that fun legwork is done, go price a truck. You will need at least need to buy one truck with a damage free repo lift of some sort. You will need to decide if you want a sneeker type that is hidden and not so noticeable (but limited in it's abilities) or a specialty repo bed with is controlled by remote control and attaches to the vehicles tires for a quick grab & go.. 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- $70,000.00 so you will need credit for a loan or a savings to invest. That is the first of your monthly payments!
C) Now that you have decided on a truck, you will 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 $2000.00 for wrongful repo ins. & commercial liability. So there is some more money for you to spend out, and a second mandatory monthly bill that will need to be paid.
D) 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. Some banks/finance companies require both the insurance and the bond while some do not require a bond. A 1 million dollar bond will run you roughly 1200.00/year in addition to your insurance premium.
E) Secured Lot for storing cars is necessary for the insurance, compliance company, banks/finance companies. Someone will eventually visit and inspect your lot. Sometimes it is a lender before signing up with your company. Your compliance company will also visit your lot and office to be sure all things are in accordance with compliance guidelines. 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 highly recommended but not always required. Finding one to lease is near impossible so you will either already own land or buy land for this expense! There is another payment! If you are able to find one for lease, there is still a payment due and in the case of a lease, it will never be paid off.
F) Office- Some clients still fax or email assignments, most are in one of the many portals used by repossession agents. 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. Many lenders frown upon a home office also. The purpose of the office is to receive faxes, send out your updates on their accounts, keep your files secure, debtor’s personal property from their cars, daily forms such as condition reports, releases, invoices, etc. When a client wants to reach you or someone in your office by phone, they expect an answer not a voice mail or you on a cell on the road so you will need someone sitting by the phones during business hours, preferably without a screaming child in the background. Clients will call with additional information on debtor’s 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 is another expense for you!
G) I saved the best for last, but I cannot stress the importance of it. Most cities have 100+ 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, beg for their work, and then prove to them that your company is more reliable than the person who is offering to do the job cheaper than you do. Keep in mind that IF you get their work you will be waiting anywhere from 15-120 days to be paid for the repo work you do for them. Keep in mind 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 yourself 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 can. They are not going anywhere; do you lower your price too? 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 payment, utilities, phone, lot rent/payment., truck payment, insurance & bond payment, office worker(s), and most important..........YOUR SALARY TO ALSO PAY YOUR HOUSEHOLD BILLS!
I hope that by now you will see why it is a better option to work for someone else and let him or her pay the bills until you are financially ready and well experienced. It is important to do some 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!!!!!!
Written by Renee McAbee
Night Stalker Recovery, SC & NC