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Many repo men -- or women -- start out working for a repossession firm to learn the ropes, then move on to going into business for themselves. It can be a very lucrative career, but you may be taking your life in your hands with angry auto owners, and you’ll have to be something of a night owl.
A repo man is a combination of a psychologist, truck driver, sleuth and self-defense artist. The best repossession agents have a placid demeanor. They must keep their cool in explosive situations. They must keep the debtors who are losing their vehicles cool as well because all states have laws that require repossessions to occur in a “peaceful” manner. No one is ever happy to see a repo man arrive, and most repossession agents try to avoid contact with debtors whenever they can because physical altercations can occur, which necessitates working many nights because the easiest time to take a car is when the owner/debtor is sleeping.
As a repossession agent, you’ll probably have no shortage of clients, but you’ll have to find them, let them know that you’re available to work and establish a relationship with them. According to PIMall, billions of dollars a year change hands between lending institutions and the repo agents who take collateral back for nonpayment. Beyond the usual auto lenders, such as banks and companies devoted to auto loans, you can potentially find work with used car lots and rental agencies when customers fail to return rental cars. Once you secure a client and you’ve done work for him, you can usually count on recurring business from him.
Repossession agents charge their clients by the job, with some breakdowns for hourly work. Banks and auto lenders generally pay a little more than used car dealers, about $200 for the base fee. This covers actually taking the collateral into your possession. But you can also charge extra fees, such as for the time you spend locating the vehicle and for the time necessitated by reports you’ll have to submit to the lender and the local police when the job is finished. On average, once you’ve established a client base and they begin feeding you work, you may have more work than you can handle, especially in a depressed economy when people can’t pay their bills. If you do three jobs a night, the actual repossession process can take anywhere from 45 minutes to three hours. At an average fee of $325 per possession, you’ve earned about $975, or at least $325 per hour for the time you worked. If you work five nights per week on average, you’ll gross more than $250,000 per year.
Costs and Equipment
Out of $250,000 per year, a repo man might have some significant costs, however. You will either have to purchase a wrecker or tow truck at an average cost of about $55,000 and make those monthly payments, or you will need equipment that allows you to enter and start a locked car. The former is more expensive but will save you the complication of having someone drive you to each scene so you can drive the repossessed car away yourself. Yearly licensing fees are also assessed in some states, as well as insurance coverage, which can run several thousand dollars per year. You’ll also have gasoline costs, and you'll probably have to rent space in a parking lot where you can keep the vehicles until the lender sends someone to collect them. If you average $8,000 a year for wrecker payments and $5,000 a year for insurance, even after deducting additional for costs of operation, such as gasoline, parking space and office supplies, you can still achieve a salary of $200,000 per year.
Beverly Bird has been writing professionally for over 30 years and is the author of more than 30 novels. She has worked as a paralegal and offers community leadership programs in areas of personal finance.