Lenders repossess cars when borrowers fail to make required payments. A repo business owner either gets the cars himself (usually when the borrower is asleep or working to avoid confrontation), or hires others to do the job. A repo business can be a lucrative small business that does not require a lot of training or related work experience. Any honest person willing to go quietly to retrieve cars from defaulted borrowers can become a repo person.
Instructions
1. Realize that, as a repo business owner, your work will be to hunt down people with financial problems and then take their cars when they least expect it. Not all people have the temperament or will to do this for a living.
2. Read up on all repo laws in your state. While the basic laws for virtually all states cite that you cannot confront the defaulted borrower, create a disturbance when taking the vehicle, or break into a garage to take the car, states may differ on the specifics.
3. Consider starting out as repo freelancer to ensure this line of work is profitable and ideal for your needs before investing the time and money in the legal process required to become a formal business.
4. Base your rates on the service required of you or your firm. Basic repo fees are usually about $200 to $300. You also will need to charge $25 to $50 an hour for locating a missing borrower. In addition, if the lender does not have a copy of the key, you may want to consider charging a locksmith or towing fee.
5. Approach local auto dealers, banks and credit unions to let them know you are available for repo work. You can do this by telephone or letter, or you can visit in person. Alternatively, you may place a newspaper classified ad or advertise on your local Craigslist.
6. Starting an actual repo business requires you to visit your local city or town hall and get a business license. This usually costs about $50 per year.
7. Ensure that the dealer or lender has the legal right to repossess the car before you go out and take it. You should ask to see, or better yet have a copy of, their title and lender-borrower contract. This protects you from legal problems.
8. You should consider incorporation (see "Resources") in your state to protect your personal assets in the case of a disgruntled dealer or borrower.
9. Consider getting a liability insurance policy (see "Resources") for your repo business. For this line of work, however, you may need to have a company for several years and a criminal background check before being issued such a policy.
10. Call the police before you or your employees repossess any vehicle to report that a repossession is occurring. This prevents unnecessary stolen vehicle reports when the borrower discovers his car is gone.
