A common question in the repo industry is, “How much money do repo men make?”
If someone told you that you can make over $ 100,000 a year in a bad economy without a college degree, you’d think you’re crazy. But some auto repos business owners are not only doing well, they are earning six figures a year. When the economy goes bad, they do better!
How much do Repo men earn?
If you start your own car repossession business, you can expect to earn $ 250 (or more) per repositioned car. If you recover two cars a night, five days a week, that’s $ 130,000 a year. It certainly takes hard work and determination, but it is possible.
Recovery agents make the most money when they are hired by lenders to locate hard-to-find debtors, called “skip tracking.” If a debtor voluntarily surrenders his car (or if it is easy to locate), an agent can only earn $ 100 for the recovery.
Repo men who work for someone else generally earn 40% of the repo fee, or $ 70 to $ 100 per repossessed vehicle (on average).
What are the pros and cons of having your own repo business?
While it is true that repo business owners make the most money, they have to pay gas and general expenses before they get paid. And, as the motto in the repo industry goes, “no payback, no pay.”
Fortunately, you don’t need to invest in expensive equipment to start a repo business. In fact, you don’t normally need a crane!
This is because many lenders keep key codes on file for each vehicle they own. Sometimes they even keep a spare set of keys! All you have to do is get a key, find the car, and drive it.
You can invest in a minimal amount of equipment to get started and reinvest your earnings as your business grows.
What are the pros and cons of becoming a repo man for someone else?
Although owning your own business has advantages, many repo agents find it easier to start working with an established repossession company. This is because in some states, there are many obstacles to overcome in becoming a licensed repossession business, including:
- Get a bond and insurance
- Compete with a required amount of training (not all states require this)
- Familiarize yourself with the laws of recovery, investigation and collection
- Invest in the right equipment, computers and software for your business
In fact, many repo business owners started working for someone else!
While the repo business isn’t for everyone, if you have a tough skin, a hard work ethic, and an entrepreneurial spirit, it can be lucrative whether you work for someone else or yourself. The key is to get the proper training before you hit the field, so you can avoid common (and costly) mistakes!