When a borrower fails to make payments, someone has to reclaim the unpaid item. Most lenders hire a third party to perform this task — cue the repossession agent. A repossession agent collects unpaid items from borrowers and returns them to lenders so the lender can recoup their losses. It’s not an easy job, but it can be highly profitable.

Learn how the auto repossession process works and how to become a reputable repossession agent. You might want to kick-start your career with one of the established high-end repo companies and later move on to freelancing.

Table of Contents

• Starting Your Brand Awareness as a Repo Agent
  • Start Reaching Out
  • Scatter Business Cards
  • Give Away Gifts
• Finding Work and Contracts for Your Repo Business
  • Contacting Companies for Contracts
  • Working at a Repo Company
  • Freelancing Your Services

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Starting your own business can be as exciting as it is profitable. By starting an independent towing company, you can be your boss and provide an essential service to your community. People will always need towing services as long as cars are on the road, and you can set yourself up to answer the call. So, how do you start your own towing company? To help you get started, we’ll review all the initial and ongoing expenses you need to know about.

Table of Contents

• Initial Tow Truck Business Expenses
• Recurring Expenses
• How Much Money Can You Expect to Make?

Initial Tow Truck Business Expenses

The truck itself is the main initial expense when opening a tow truck business. How much does it cost to buy a tow truck? The answer depends on the kind of vehicle you want and the current market. Choosing the right truck for your towing business can significantly impact your operational efficiency and costs. For more details on suitable options, check out our guide on wheel lift compatible trucks.

A new light-duty tow truck will be on the lower end of the spectrum, although still more than many used vehicles. An ultra-heavy-duty tractor-trailer on the high-end price range can handle even the biggest towing jobs. You might choose to take out a mortgage, which lowers your initial costs and raises your monthly expenses.
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Stay Safe and Compliant: Essential OSHA Guidelines for Tow Truck Drivers

There is no denying the towing industry is one of the more dangerous professions out there. Jobs in this area bring drivers to challenging locations where moving vehicles, equipment and objects introduce risk.

According to the U.S. Bureau of Labor Statistics, 52 fatal injuries occurred within the motor vehicle towing industry in 2022. Following some tow truck driver safety tips can save lives and prevent injuries or dangerous mistakes.

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A majority of Americans take out loans to pay for their new vehicles — as of 2019, total auto loan debt in the U.S. was nearly $1.2 trillion. Instead of borrowing to buy a car, about 30 percent of drivers decide to lease their vehicle, effectively borrowing the car from a dealer for a set amount of time.

Those who finance or lease a vehicle are expected to pay the lender or dealer according to the loan or lease terms. If a driver stops making payments, the lender can repossess the car. About two percent of car loans and leases in 2019 were delinquent, meaning the driver was at least 30 days past due on paying.

Someone has to have the job of repossessing delinquent vehicles. Depending on your disposition and skill set, that someone could be you. In this guide, we’ll discuss becoming a repo person and what it takes to become a repo man.

Table of Contents

• The Type of People Who Are Repo Agents
• How to Become a Repo Man
• How to Get a Job as a Repo Man
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Whether you miss a single or several payments on your car loan, the situation shouldn’t be taken lightly. You must act fast and make smart, honest decisions based on your finances and circumstances. In many cases, failing to pay consecutive installments can result in repossession of your vehicle — but you can take several proactive steps to avoid it.

Lift and Tow will help you understand the impact of voluntary repossession and how voluntary repossession works.

Table of Contents

• How a Repossession Affects Credit Scores
• What Is Voluntary Repossession?
• Should I Voluntarily Repossess My Vehicle?
• How to Avoid Repossession

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Table of Contents

• How Much Can a Repo Man Make?
• Costs and Fees to Expect
• How Much Are Repossession Fees
• How Much Money Can a Repo Man Make?

A repossession man or woman is responsible for reclaiming anything people take out loans for. When a borrower doesn’t make the necessary credit payments, the lender can hire a repo man to do the dirty work and repossess the item—often a vehicle.

Lift and Tow has devised a guide on getting paid, expected fees, and how much a repo man can make. If you’re looking to become an independent agent, we can help you invest in the best equipment for your repossession company.

Understand The Repo Process

How Much Do Repossession Agents Make?

When working under a repossession firm, the average is about $32,500. The company may offer bonuses as well as commissions. However, a repo owner’s salary can reach several hundred thousand dollars yearly if you set high rates and have a steady influx of clients. How much money a repo man makes depends on the amount you charge for each vehicle, which can range between $150 and $400.

Working as a repo man, you can receive incredible money for little effort. Your duties include driving to a specified location, finding the correct automobile and towing it. The average repossession takes 15 to 20 minutes, not including transportation. Many states don’t require agents to have a court order. Instead, as long as the lender gives adequate notice and time to the driver, you can conduct your work.

Most people start as repo agents with a repossessing company, where they receive weekly payments and about four to five cars each week. It’s also important to understand the requirements to be a tow truck driver to ensure compliance and safety in your operations. Working as an employee, payment per vehicle is not accessible. Start with a repossession firm to learn the ins and outs of the operation, but after gaining experience, you can go into business on your own.

As an independent repossessor, you receive a payment per car, charging several hundred for each depending on your clients and extra fees. Steady work is often in high demand. You can find jobs by contacting auto lenders and other agencies in the business. Once you form a relationship with them, you’ll likely obtain a repeat customer who will need you for future assignments.

Can a repo man make a lot of money? In many cases, the answer is yes. However, how much money you make a week depends on how many clients you are willing to take on. Each client has a multitude of customers. For example, every bank and car lender you partner with makes deals with thousands of drivers — multiplying your number of cases.

While your clients are often banks and lenders, you can also work with used car dealers. The average repo man charges banks about $200 per deal, and pre-owned car suppliers about $100. Vehicle rental agencies are another potential patron when people don’t return rented cars. Rental companies are one of the more expensive recoveries because obtaining a leased vehicle requires you to implement skip traces and other techniques to find the automobile.

As your skills increase with each repossession, you can charge more for the time it takes to locate vehicles and report each situation. A repo man can make much money, but the job isn’t for everyone. You must be calm in tense situations and have a flexible schedule to work at night. Many repossessing jobs work best when people are asleep to avoid confrontation.

Your paycheck also relates to whether you’re making a voluntary or involuntary repossession. Involuntary involves more risks because you’re going after people who owe several skipped payments. In most situations, they will be unwilling to lose their car and might be angry or even openly hostile. Remaining composed is key to conducting a peaceful repo. Many states require peaceful exchanges for a legal repossession to occur.

Voluntary repossessions are more cordial and easier to conduct because the debtor will admit to not making payments. When you arrive to reclaim their vehicle, the process often happens with little to no problems.

How much repossession agents make depends on whether you’re an employee or the owner. Other factors include the type of reclaiming you do and which state you work in. The trickier the situation, the more money you’ll likely get.

Costs and Fees to Expect

Operating as an independent contractor, you must pay the full taxes and other expenses such as gas and transportation to each location. Life, health, and car insurance also contribute to extra charges. Make sure to set aside money to make tax payments each quarter and consider additional expenditures that are deducted from your check for each reclamation.

You also need to take specific fees into account. Understanding the operating expenses of a towing business can help you better manage your finances and plan for unexpected costs. For example, lenders may ask you to locate a missing vehicle and pay for any associated costs for the investigation. In most cases, you must document the car’s condition and take photos.

Does your state charge a licensing fee? Each state has different regulations when it comes to repossessions. Some require a repo license, and each state has write-ups on notices of intent, liquidation documents and redemption requirements. Check out your state’s laws, regulations and repo requirements to ensure you conduct legal jobs.

How Much Are Repossession Fees

Repossession fees can range between hundreds and thousands of dollars. Those fees build up the longer a vehicle is impounded, so it’s important to act quickly to avoid large fees.

Interested In Building Your Fleet? Get Effective Equipment from Lift & Tow

Lift and Tow can help elevate you in the repo industry with our towing solutions. With 20 years of experience in the industry, our team of professionals will help you find the most reliable and durable tow. When you need efficient loading in the repo business, our towing products reduce manual labor and easily convert your truck.

Our hidden wheel lifts attach to the underbody of your pickup, so you don’t have to invest in an expensive tow truck. Contact us to see how we can provide the best equipment to support your upcoming repo business venture.

If you want to become a repo agent, you will first need to determine whether you have the right kind of personality for the tasks that the job entails. It takes tremendous amounts of courage and a hefty backbone to carry out vehicle repossessions, as you perform a service in which there is usually going to be a disgruntled party. The steps in car repossession are not complicated, but they involve more than simply going out to reclaim an unpaid vehicle.

Table of Contents

• How to Repo a Car?
  • Know the Repo Laws of Your State
  • Make Sure the Debtor Is in Default
  • Locate and Verify the Car
  • Choose the Method to Repossess
  • Do Not Breach the Peace

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Purchasing a car, truck or SUV is an investment — one that may take several years to pay off. If you’re experiencing unforeseen financial difficulties and can’t pay on your car loan, you could be subject to auto repossession at the hands of a repo agent.

Not sure what that means? Let’s discuss the meaning of repossession, what the process looks like and what you can do to get your repossessed car back.

Table of Contents

• What Is Car Repossession?
• How Does Repossession Work?
• How Long Does the Repossession Process Take?
• How to Get a Repossessed Car Back
• Repossession Meaning FAQs
• Can You Become a Repo Agent?
• Find the Right Repo Equipment for the Job

What Is Car Repossession?

Nearly 80% of new cars and about half of used cars are purchased using some form of financing. When you borrow money from a lender, you agree to make monthly payments until the car is paid off and you own it outright. However, you could fall behind on payments.

Automobile repossession is an act where a lender reclaims a vehicle after a period of nonpayment from a debtor. Lenders authorize repo agents to retrieve defaulted vehicles on their behalf. Simply put, auto repossession results from failing to make payments on a car you have yet to pay off in full.

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We recently looked at how to start your own repo business. This can be an extremely profitable line of work. Unlike most other businesses, repo businesses can benefit rather than suffer from tough economic times. Even when the economy is doing relatively well, there will always be people who fail to make payments on their vehicle. The economy has been improving in recent years, and yet still, at the end of 2017, more than four percent of auto loans were 90 days late or more — the highest rate in five years.

Table of Contents

• Extend Your Reach
• Build Your Brand
• Work on Your Website
• Focus on Sales
• Only Hire and Keep the Best of the Best
• Develop Service Standards and Procedures
• Leverage Client Testimonials
• Purchase High-Quality Equipment
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