A common question in the repo industry is, “How much money do repo men make?”
If someone told you that you could make over $100,000 a year in a bad economy without a college degree, you’d think they were crazy. But some auto repo business owners are not only doing well – they’re making six-figures a year. When the economy does bad, they do better!
How Much Do Repo Men Make?
If you start your own auto repossession business, you can expect to earn $250 (or more) per repo’ed car. If you repossess two cars a night, five days a week, that’s $130,000 a year. It certainly requires hard work and determination, but it’s possible.
Repossession agents make the most money when lenders hire them to track down hard-to-find debtors – which is called “skip-tracing.” If a debtor voluntarily gives up their car (or if they’re easy to track-down,) an agent may only make $100 for the recovery.
Repo men who work for someone else typically earn 40% of the repo fee – or $70 to $100 per recovered vehicle (on average.)
What Are The Pros and Cons of Owning Your Own Repo Business?
While it’s true repo business owners make the most money, they have to pay for gas and overhead expenses before they get paid. And, as the motto in the repo industry goes, “no recovery, no pay.”
Fortunately, you don’t need to invest in expensive equipment to start a repo business. In fact, you usually don’t need a tow-truck!
That’s because many lenders keep key codes on file for every vehicle they own. Sometimes they even keep a spare set of keys! All you have to do is get a key made, find the car and drive it away.
You can invest in a minimal amount of equipment to get started, and reinvest your profits as your business grows.
What Are The Pros and Cons of Becoming a Repo Man for Someone Else?
Although there are advantages to owning your own business, many repo agents find it easier to get started working with an established repossession company. That’s because in some states, there are many hoops to jump through to become a licensed repossession business, including:
- Getting bonded and insured
- Competing a required amount of training (not all states require this)
- Familiarizing yourself with repossession, investigation and collection laws
- Investing in adequate equipment, computers and software for your business
In fact, many repo businesses owners got their start 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 getting adequate training before you head out into the field, so you can avoid common (and costly) mistakes!