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 own boss and provide an essential service to your community. Towing services are an evergreen business. As long as there are drivers on the road, they will need someone to help them out.

So, how do you start your own towing company? You need to develop a business plan to set yourself up for success. 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?

Understanding Towing Expenses in the Towing Industry

Starting a business comes with many expenses, and being aware of them beforehand will help you develop a successful business plan to turn your investments into profit. There are two types of towing expenses you will have to manage: upfront and ongoing. The first will be the base to acquire everything you need to start your business, and the latter will keep it running.

Having a clear view of your expenses is the best way to start a towing company. Expenses give you an idea of how much you should charge and what volume of work you’ll need to tackle to make your towing business profitable.

Common Upfront Towing Expenses for Business Owners

Upfront costs are the first investment you make in your business. Knowing an average for every expense is crucial for your tow truck business income, budgeting and funding in the early stages.

The Truck

The truck itself is the main initial expense when opening a tow truck business. The amount it costs to buy a tow truck 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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Key Safety Standards and Best Practices for Tow Truck Operations

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 2024, the total auto loan debt in the U.S. was approximately $1.6 trillion. Instead of borrowing to buy a car, about 20 percent of drivers decide to lease their vehicle, effectively borrowing the car from a dealer for a set amount of time.

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Understanding the Impact of Voluntary Car Repossession on Your Credit Score

Whether you miss one 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 (repo) agent — also called a repo man or woman — reclaims anything people take out loans for. The item serves as the collateral for the loan against it. When a borrower doesn’t make the necessary credit payments, the lender can hire a repo man or woman to do the dirty work and repossess the item, often a vehicle. The repossession industry offers ample opportunities for individuals looking to earn a lucrative income and have an exciting job.

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

Average Repo Man Salary

The average income of a repo agent in the United States is around $33,564. When working under a repossession firm, 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 car repossession rates and have a steady influx of clients. How much a repo man makes per car depends on the amount you charge for each vehicle, which can range between $150 and $400. Some repo agencies pay their employees based on an hourly wage, whereas others pay a set amount for each job the agent completes.

Working as a repo man or woman, you can receive incredible money for little effort. Your duties include driving to a specified location, finding the correct automobile and towing it. 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.

Repo agents work with a variety of lenders, including:

• Banks and credit unions: If a person cannot make timely payments on their car loan, their bank or credit union hires a repo man or woman since the car is the collateral for the loan.
• Used car dealers: A car dealer will repossess a car if the customer has late or missing payments or has provided false information on their application.
• Car rental companies: Vehicle rental agencies need a repo man or woman 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.

The average repo man charges banks about $200 per deal and pre-owned car suppliers about $100. The amount you charge to your clients is determined by qualities like:

• The size and weight of the vehicle.
• Your pricing structure, such as if you charge a flat rate or by the mile.
• The towing distance.
• The time of day you completed the job.
• Demand for repo services in your area.

Factors That Determine a Repo Man’s Income

Can a repo man or woman make a lot of money? In many cases, the answer is yes. However, how much money you make a week depends on many factors, such as:

Amount of Clients You Have

How many clients you are willing to take on affects your income. 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.

Experience

As your skills increase with each repossession, you can charge more for the time it takes to locate vehicles and report each situation.

Type of Repo

The type of reclaiming you do will determine your paycheck. The trickier the situation, the more money you’ll likely get.

Repo types include 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.

Employee or Owner

How much repossession agents make depends on whether you’re an employee or the owner. Employees are paid per car, but car repossession rates are set by the owner. While owners will likely make more, they’ll also be responsible for business expenses.

State You Operate in

Another factor is the state you work in. Every state has different repossession laws that determine how a repo must occur to be legal. State-sanctioned licensing, insurance and training requirements can also affect income.

Costs and Fees to Expect in the Repo Business

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 are conducting 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.

How to Become a Repo Agent

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 for being 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 repossession agent, you receive a payment per car, charging several hundred for each, depending on your clients and car repossession rates. 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.

A repo man or woman 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.

Interested In Building Your Fleet? Get Slide-In Towing Equipment Today

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.

Get in touch to see how we can provide the best equipment to support your upcoming repo business venture.

Contact Us Today

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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