Whether you miss a single or several payments on your car loan, the situation shouldn’t be taken lightly. You need to act fast and make smart, honest decisions based on your finances and personal circumstances. In many cases, failing to pay consecutive installments can result in the repossession of your vehicle — but there are several proactive steps you can take to avoid it.

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

How a Repossession Affects Credit Scores

Vehicle repossessions can affect your credit score if you have any of the following:

• Late payments
• Repossessions
• Collections
• Court judgments

Each can show up on your report as a separate entry. Repossessions, collections and court judgments can remain on your credit report for up to seven years, reading as a derogatory mark and dropping your credit score by 100 points.

Repos can also affect your ability to get a vehicle loan in the future. If you get approved, a lender may charge higher interest rates because of the defaulting risk. On top of your credit score, repos affect your bank account. Even after your car is taken and sold, you often need to pay the difference, which is called a deficiency balance.

Your credit undergoes devastating, long-term effects when your car is repossessed. Both voluntary and involuntary car repossessions can even affect a cosigner’s credit because each person shares the responsibility. However, a cosigner benefits from the same rights as the primary borrower if a repossession occurs.

What Is Voluntary Repossession?

Also called a voluntary surrender, voluntary car repo happens when you can’t afford your car payments, and you return your vehicle to the lender on your own terms. Many believe this is the safe way out, but it isn’t always easier or less painful than going through an involuntary repo.

If you’ve exhausted all your options and can’t meet the lender’s loan agreement terms, here’s what you can do. Steps for a voluntary repossession include:

• Call the lender and explain the situation.
• Set up a time and location to return your car.
• Record the date, time and personnel’s information for future reference.

A voluntary repo is more immediate than involuntary. Involuntary is when a lender takes action to seize your vehicle when a loan is a default.

Should I Voluntarily Repossess My Vehicle?

There are many pros and cons of a voluntary repossession. But whether you choose to go ahead with the process or rely on involuntary, your credit score will still be affected.

Advantages

Here are some of the benefits of voluntarily surrendering your car:

• Avoid stress and the emotional aspects of an involuntary repo
• Take your car in during a time that suits you
• More convenient and doesn’t have to happen in front of others
• Stop your car payments

Disadvantages

However, volunteer repossession is still repossession and comes with significant drawbacks.

• Still need to pay the deficiency balance after a lender sells your car and applies the proceeds to your loan
• Still affects your credit score and shows up on the history
• Gets reported by your lender to credit bureaus
• Has the same amount of damage as an involuntary option
• Responsible for repo fees
• Account turns over to a collection agency if you can’t pay
• A lender can take you to court

Only rely on a voluntary repo as a last resort when you’re out of options and negotiations. It’s only a slightly better option than involuntary.

How to Avoid Repossession

Instead of giving up and turning in your car, you can handle missed payments the right way. One of the most critical steps is to have an honest conversation with your lender about why you missed the payments. If they’re willing to work with you, you can determine a solution that’s ideal for you both. It’s better to prevent a repo and pursue alternatives to help limit the damage to your credit score.

1. Know How Much You Owe

If you can cover the initial payment you missed, pay it off right away. But if you’re tight on finances, start by understanding your loan balance, term and interest rate. Is there a late fee?

Review your budget to see if you can pull money from other expenses or eliminate some altogether. Implementing the 50/30/20 budget is a good place to start if you don’t already have a budget in position. Step one is determining whether your missed payment is a one-time occurrence or if it will be an ongoing issue.

2. Recognize Your Options

It’s vital to be honest with yourself and your lender. Was the missed payment a one-off mistake, or is it a sign you can’t afford your loan? If you can meet the expense of your missed and current payments, you may have to pay a late fee right away. Sometimes, lenders may waive late charges if you have open communication. You can also inquire about automatic payments to help you avoid missed expenses.

In case you can’t afford a single car payment, loan deferment is common. It’s when the lender pushes a missed payment to the end of your loan term. You have to pay off the interest owed for that month.

When you can’t afford the loan at all, you need to seek deferment for the remainder of the month to stop the threat of damage to your credit score. It would help if you looked into long-term solutions, such as refinancing the loan, trading your car for a more affordable vehicle, picking up a part-time job or selling your car.

Consider selling your vehicle, especially if it’s worth more than your current loan balance. Next time, you can invest in a used car that’s an older make and model, so you don’t have to borrow money from the bank. You can also use other forms of transportation like buses, trains and taxis.

3. Call Your Lender

After you figure out what you owe and your options, call your lender. Ask about solutions like deferment and other suggestions they may have. Remember to be kind because you’re asking for a favor. Explain what you’re willing to do to make up for the missed payment.

Honesty is key because you will often have to prove your story. Lenders would rather spend the time helping you as opposed to spending money on repossessing your car. During the conversation, you may be able to negotiate an extension, enter into a deferment or receive a revised payment schedule.

Communication is critical when you’re seeking support from your lender. Don’t ignore their calls and letters. Instead, confirm your options and reach out to them for assistance. You can save your credit by avoiding repossession.

Learn About Lift and Tow

Sidestepping repossession can save you from incurring dings in your credit score. If you take the proper steps, you can avoid voluntary and involuntary repos. Lift and Tow is the creator of the hidden wheel lift that attaches to the underbody of your pickup. Our solutions convert your vehicle into a tow truck and can remain hidden when not in use. We engineered an economical alternative to investing in a tow truck to reduce manual labor and deliver efficient loading. We deliver value to your operations while giving you a competitive advantage in the industry.

Discover what solutions we offer or reach out to us online to learn about how you can avoid car repossession.

How Much 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 payments on credit, the lender can hire a repo man to do the dirty work and repossess the item — which is often a vehicle.

Lift and Tow has devised a guide on the process of 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 through the process of investing in the best equipment.

How Much Do Repossession Agents Make?

Working as a repo man is a job where you can receive incredible money for little effort. Your job 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.

Starting as a repo agent, most people begin with a repossessing company where you receive weekly payments and about four to five cars each week. 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 the number of 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 begin to charge more for the time it takes in locating vehicles and reporting each situation. A repo man can make a lot of 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.

Costs and Fees to Expect

If you’re operating as an independent contractor, you need to pay the full amount of taxes as well as other expenses such as gas and transportation to each location. Life, health and car insurance also act as key proponents in extra charges. Make sure to set aside money to make tax payments each quarter and consider additional expenditures that get taken out of your check for each reclamation.

You also need to take specific fees into account. For example, lenders may ask you to locate a missing vehicle and pay for any associated costs for the investigation. In most cases, you will need to document the condition of the car 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. Make sure to check out your state’s laws, regulations and repo requirements to ensure you conduct legal jobs.

How Much Money Can a Repo Man Make?

What is the salary of a repo man? When working under a repossession firm, the answer to this question is about $32,500. The company may offer bonuses as well as commission. However, a repo owner salary can reach several hundred thousand dollars each year 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.

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 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.

Become an Independent Auto Repossessor With the Right Equipment

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

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 online to see how we can support your upcoming repo business venture with the best equipment.

If you have aspirations of becoming a tow truck driver, you should know there’s more to it than hauling broken down vehicles.

What does it take to be a tow truck driver? You need the proper training, licensing and certifications as well as interpersonal skills and sufficient physical fitness. Being a tow truck driver takes hard work and dedication. But without towing professionals, many drivers would be stranded on the road with no help. If you want to know how to become a tow truck driver, the following guide will show you what it takes.

What Are the Basic Prerequisites for Becoming a Tow Truck Driver?

Towing professionals help with various situations, including abandoned cars, vehicle breakdowns, car accidents, illegal parking, impoundment and roadside assistance. The job may involve traversing and navigating all sorts of roadways from windy country roads to jam-packed highways to steep hills and mountains to bustling city streets.

Regulations related to being a tow truck driver vary from state to state in the U.S. Most need you to pass a series of tests as well as licensing programs. Once you pass, you will then be eligible to operate a tow truck. If you’re unaware of what your state calls for, contact the U.S. Department of Transportation. They can point you to the specific laws and guidelines to follow for your state. If you work in an area that closely borders another state, you may need certification for both.

Basic stipulations of becoming a tow truck driver include:

• Age and education
• Physical assessments
• Driver’s license
• Background checks
• Proper training

Check out the following details to see if you could meet the five requirements of becoming a tow truck driver.

1. Age and Education

You must be at least 18 years or older to operate a tow truck. However, many companies require several years of experience, making the typical ages to begin driving between 21 and 25. It’s not a requirement to have a specific education, but many employees like to see at least a high school diploma or a GED.

2. Physical Assessment

Towing companies often like to see that you can pass a physical exam that includes vision, hearing and a drug test. You must be in good health to keep up with the physical demands of the job.

You should be able to lift and operate heavy equipment such as tow chains and tires. Can you work in various weather conditions? Can you drive in different elements like the snow, rain, hail and wind? What about shoveling out a car that’s snowed in? A tow truck job requires mental and physical strength.

When it comes to vision and hearing, can you see long distances and navigate through tricky traffic patterns? Do you have good eyesight for both short and long distances so that you can hook up cars and maneuver equipment? Excellent hearing is also essential when working at an accident site or other busy area.

Some employers may even require that you take a drug test to become a tow truck driver. They’re looking to see if you’re drug-free since heavy machinery is a central component of the profession.

3. A Valid Driver’s License

Not only is it fundamental for you to have a standard state-issued driver’s license but also for you to hold a clean driving record. Do you have a history of speeding, traffic violations or DUIs? Your file will give employers an idea of how you handle the road and if you practice safe driving.

4. Background Checks

Sometimes your employer may run a criminal background check because you have the potential to be in charge of moving people’s valuable possessions. While the car itself is expensive, sometimes, so are the items inside. You must be a trustworthy tow truck driver to move cargo from one place to another safely. Some states may require you to get fingerprinted.

5. Driver Training

It’s easy for a new tow truck driver to learn skills while on the job by shadowing experienced drivers or working as an apprentice. On-the-job training is one of the best ways to learn about a company’s specific policies, safety procedures and strategies. While there may not be any educational background needed, you can gain experience, then pursue your certification. From there, your certification will verify that you learned the essential skills to advance your tow truck driving career.

You can also communicate with other tow truck operators to find out what companies and firms offer the best training in your area. If you move from one towing business to another, each one will train you as a new employee so that you understand their policies. Even when you complete your training, licensing and certification goals, continue taking classes and state-specific educational courses to keep yourself up to date.

Now, what’s the next step? Licensing and certification are the next stages in pursuing your tow truck driving goals.

What Licensing Do I Need?

While there is no law stating you need a license to become a tow truck driver, the federal law — according to the United States Department of Transportation — says you must hold a commercial driver’s license, CDL, before towing more than 26,000 pounds.

Some states may require any tow truck professional to have a commercial license regardless of how much they tow. Again, licensing is dependent on various state regulations, but most states will require a CDL license before you can obtain a towing job.

Light-duty trucks can weigh about 14,000 pounds, medium-weight vehicles are at least 26,000 pounds, and heavy-duty trucks can reach 48,000 pounds.

You can acquire a commercial license through in-person training, plus a written exam. Once you pass the driver’s test, you have a massive competitive advantage when looking to be hired. You also become a more versatile candidate.

Certifications to Be a Tow Truck Driver

When you’re ready to take the next stride in your tow trucking endeavor, you can conduct your certification in-person or online through the Towing and Recovery Association of America. The certification program is available for those who already have experience in towing. TRAA creates national standards for tow truck drivers, and the training covers aspects like customer service, safety, equipment, truck maintenance and incident management.

Three levels of certification exist.

• Level 1 – Light Duty: At the first stage, you must meet all your state’s driving requirements for light-duty training. You will also need 90 days of tow truck experience within the last five years. Level one certification includes a test with 100 questions. You will receive the certificate within several days of passing the exam. With level one certification, you can operate a truck with a Lift and Tow hidden wheel lift.
• Level 2 – Medium/Heavy Duty: The second certification program is the middle level that entails one year of employment as a heavy or medium-duty tow trucker. Other prerequisites include one year as a recovery operator as well as having a commercial driver’s license. You also need level one certification. Level two’s test has a written section on theoretical knowledge as well as an oral segment to examine how you would respond to realistic situations.
• Level 3 – Heavy Recovery Specialist: The final level is where you receive your heavy-duty certification. You will need a commercial driver’s license, including endorsements and a level two certification. Two years of professional experience is also necessary. The exam has a written segment to test your theoretical awareness and an oral portion like level two.

Lift and Tow suggests that you continue with your certification until you reach the third and final tier. It will help you become a well-rounded tow truck driver that’s capable of responding to a variety of jobs.

Types of Tow Trucks You Can Operate

There are three types of tow trucks that you can operate. While you often have one assigned to you, it’s important to know the limitations and operations of each if you start working your way up to more complicated tasks.

1. Conventional

Also known as a hook and chain truck, conventional towing vehicles are what most people think of when they picture a tow truck. The truck wraps its chains around a vehicle’s axel and frame while the back arm of the truck lifts the car to where the back or front two tires lift off the ground. Slip the vehicle in neutral, and you have an easy towing rig.

Conventional towing machines are not as popular as some other types because the chains can scratch car paint. Therefore, they are a popular choice for when accidents occur. All-wheel drive vehicles can’t be towed with a conventional solution because the towing device can damage the driving system.

2. Wheel Lift

Similar to conventional tow trucks, the wheel lift — or full float truck — has a metal yoke that raises one of the car’s axels, lifting either the front or back tires off the ground. But hydraulics, instead of chains, suspend the truck or car to prevent damage.

3. Flatbed

Also referred to as rollback trucks, flatbeds are ideal for expensive vehicles or vehicles with an excessive amount of damage that prevents the wheels from rotating. They use a hydraulic system to lower and raise a car or truck bed onto the ramp.

Lift and Tow products are wheel lift solutions that get the job done no matter the situation.

Typical Attributes of a Tow Truck Driver

It all comes down to one final question — what does it take to become a tow truck driver?

In any situation you find yourself, patience and the willingness to support people in need is at the forefront of your duties. A person who relies on your assistance will often be frustrated, on a time-crunch, worried, angry or distraught. Their circumstance will often seem helpless until the tow truck driver arrives and saves the day. It’s crucial to listen and be empathetic to your customers because we have all been there, and it’s never a fun time.

When you get called to respond to an accident, there is potential for exposure to unpleasant sights. You may have to deal with people who are traumatized, stunned or emotional in other ways. Handling high-stress situations can be rewarding, primarily if you can provide critical aid to people in dangerous situations.

Although you don’t get to choose the time, place or situation, it’s imperative to prepare yourself for anything. You may even experience working in an unfavorable location like a busy highway or deserted road. Having an outgoing personality can also serve you well.

The characteristics of a tow truck driver include being able to handle various working conditions, too. You can’t put a cherry on top — plain and simple, it’s hard and dirty work. Sometimes, you may be asked to do other things like assist someone who needs help fixing a car or changing a tire. And think about how many people get locked out of their cars every year or need help jumpstarting a battery. You may even have to help with connecting loose wires, replacing spark plugs and adding fuel.

Knowing how different cars and trucks work is another useful ability to have. Understanding how different makes, models and years of vehicles work and knowing how to fix them is vital. What if you’re not on a call? You may need to work at the mechanic shop. Transitioning from one role to the next will help you gain an advantage in your tow lifting career.

As a final thought, consider the flexibility required for the job. Being a tow truck driver means you’ll have a job every day of the year for full 24-hour days. Cars, trucks and other vehicles need towing at all hours of the day and night, allowing you to work late at night, mid-day or early mornings.

How Do I Get Started?

Starting your career as a tow truck driver starts by applying to tow companies, service stations or auto salvage businesses. Begin by looking at state employment services as well as newspaper ads and internet jobsites.

If you’re looking to start your own towing business, Lift and Tow can help translate your goals to reality. We will talk with you one on one about what you’re looking to accomplish. Our experts will help you determine which towing product best fits your application and budget.

Any of our repo wheel lift solutions can transform your vehicle into a full-service tow truck. Available in various models, our wheel lifts can install on three-quarter-ton trucks as well as bigger pickups. They attach to the underbody of your vehicle and can easily conceal when you’re not working. We will help you choose between our Z, 5 and 3 series of towing kits.

Once you have a tow truck ready at the turn of your key, you can start building your business by filling out the appropriate paperwork for your state. If you want to be a single operator, that is certainly an option. But if you’re going to build a startup, you will also want to consider how you’ll grow your fleet, hire employees and make your mark on the community.

Count on the Lift and Tow Professionals

Our tow systems offer fast and efficient loading, incredible durability and the versatility to tow various kinds of vehicles. Our solutions help you avoid buying an entire towing rig and give you the freedom to convert your truck into a multi-purpose vehicle.

Check out our towing products online to see which solution matches your towing expectations. You can also reach out to us online for further support with our towing kits.

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.

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Due to the high cost of automobiles, most drivers take several years to pay off a car, truck or SUV. Financial problems are not uncommon, and a driver could easily face some unforeseen hardship during a car loan. If you find yourself in this kind of situation, your vehicle could be subject to auto repossession at the hands of a repo agent.

What Is Auto Repossession?

Automobile repossession is an act where a lender reclaims a vehicle after a period of nonpayment from a debtor. For example, if you drive off a lot with a new vehicle under a four-year payment plan but fall behind on payments after 18 months, your car could be subject to a repossession. Auto repossession is authorized by lenders and carried out by repo agents, who are sent to reclaim defaulted-on vehicles. Simply put, auto repossession is a consequence of failing to make payments on a vehicle 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.
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Whether you are considering entering roadside assistance or you want to add a towing service to your mechanic facility, purchasing the right equipment can seem intimidating. Traditional tow trucks are expensive and bulky, and you may be asking yourself, “Can I make my pickup into a tow truck?” The answer is yes. You can convert your pickup truck into a repo truck or towing vehicle — it’s as simple as purchasing a wheel lift that is compatible with your truck and acquiring a suitable pickup that lifts the correct amount, has enough power and contains enough space.

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When it comes to loans, the returns are spotty. For every loan borrower that fulfills his or her payments in a timely manner, there is a borrower who falls behind on payments. In a lot of cases, the borrower will fall so far behind that payback becomes impossible. But regardless of whether or not the issue comes down to circumstances beyond the borrower’s control, a debt is a debt and a contract is a contract. Simply put, you can’t own a product that you didn’t pay for with your own money.
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