Just like in skip tracing, pricing for repossession varies greatly depending upon the type of collateral, the complexity of the repo, the tools needed or in some cases the intelligence needed to handle repossessions the right way avoiding breach of peace and illegal repossessions. For the sake of this article since cars are more common in the business and most people going to do repossessions go in with full intentions of working with cars.
I haven’t been in the car repo game for a while, but being around in the business I have read that people are doing repossessions for as low as $100.00 these days and all i can think of was pure desperation. I mean I don’t even think a voluntary repossession should be that low. In states where a license is required, it’s not one of those deals where you pay a fee and you get license. These licenses are extremely tough to get rightfully so in order to help keep the trash out of recovery all together. I have a feeling if the licensing process wasn’t so difficult and such a long process, some real simple minds might start charging $50.00 without even realizing they are losing money. It reminds me of a Pizza Hut delivery driver, while making a low wage and getting tips the reality of the matter is even if they take home $50.00 per night, the short and long term expenses come into play and the driver is really losing money but these companies understand that people see the cash and immediately think that’s the real money made. Here are some of the obvious expenses that most seem to forget
Delivery driver expenses
- Oil changes
- Depreciation especially for added mileage
All these drivers really see is the cost of gas for the evening and barely put into consideration all the other factors which are actually big when playing with such a small revenue stream. In essence the company is using your car and they don’t have any expenses in relation to car maintenence. However they do have a super high driver turn over rate, I guess when these drivers realize that are really going home with $15.00 a night they smarten up real quick and walk away.
Repossessions have a similar expense rate plus the added danger that nobody really equates in and even if they did it would still be far too cheap. So instead you have these repo whores out there doing car repossessions on the cheap, without the realization that a repo license is not nearly the same as a tow license, not to mention the license cost is much higher. The 2 year internship must have some meaning monetarily, the dangerous situations, the insurance, the expenses, the right hand man if you bring someone with you, the extra addresses given by the banks or skip companies is way different from some tow company going out to an actual address with a friendly person waiting with no bagging, listing of personal property, with no calling it in to the police and verification of VIN.
It is a professional business
Bottom line the difference is huge therefore the pricing should be much higher as well. I understand that the new guys are trying to get in the door, but this is not the right way. I would think that the larger finance companies and banks would would never want to risk it with a repo pricing whore knowing that it is simply not a long term solution. It’s tough breaking in the door, but there are other ways to do it, this is not the food truck business selling arepas for $5 and stealing one another spots all day day long, this is a professional business and needs to be priced professionally as it always has been.
Prices for repossessions need to be well thought out and every little expense needs to get added in with enough to leave a nice pay check for your hard work.