Before you consider trying to start an asset recovery venture, or become a repo-man, as it is commonly referred to, read this article. Others have written eHow articles on this, but, I can tell you - they have never done it.
Find a truck. I don't care how many people say you can do this without a truck, you cant. Yes, you will have drive-away coverage as part of your general liability policy, NO, you wont always get the keys to a car, and NO, you cant hotwire everything. What you can do is find a used tow truck - an old F350 modified with the tow attachments - for a reasonable amount maybe, or, buy a used dualie and buy the after market minuteman attachments. It does not matter what you use, just make sure you have a way to grab vehicles that are full time 4x4. This will usually mean you either have a flatbed truck, or wheel lifts/dollies.
This will be your most expensive purchase. Even if you have an old pickup you can modify, or a car dollie to pull behind it, you still need wheel dollies. The minuteman attachment is $8,000.00, not installed.
Hey look! I have a truck, I can repo cars now! No. While it may seem like a logical approach to make sure you have the equipment ahead of time, it isn't. Before you even think of investing in equipment, make sure you can afford all the certifications, licenses, insurance and bonds that you will need. If you cannot obtain the items in this step, that shiny truck is just going to sit there.
The first step is to find an insurance company that will actually write you a policy for your new business, not the truck. This is a General Liability Policy covering wrongful repossession, accidents etc. There are only a handful of companies in the US that write policies for repossession. If you can find a company that will write you a policy, ask them for a Professional Bond, in the amount of at least $750,000.00 as well as the $1 million dollars per loss Commercial General Aggregate (including personal injury and wrongful repossession).
Second. Are you anywhere ne ar a state border, and if so, will you be crossing into that neighboring state for repossessions? If so, you will need a DOT number (free) and an MC (operating authority) number from the federal govt. There is NO way around this step. The MC number is $300.00 and takes up to 6 weeks to get.
Third. Look around for a truck - don't buy it. Then contact an insurance agent that writes commercial auto policies. As soon as you tell him/her this is for repossession, they will either tell you NO, or, your price just went up by about $3k a year. Either way, you need a $1 million dollars per loss Commercial Auto Liability policy.
Insurance is the hardest part of the puzzle here, and the 2nd most expensive thing on your list.
Now you have a general liability policy, a commercial auto policy, a professional bond, and a MC number. You are not done.
Fourth. Check with your neighboring states and inquire about their policy on for hire commercial vehicles. You could b e looking at up to $500.00 to have operating authority in each state.
Fifth. Contact a company to give you an FDCPA test/certification.
Sixth. Get an EIN.
Now you have the operating authority for your states of operation, your insurance/bonds, and certifications. Now is the time to equipment hunt.
You have your truck, you have the general and commercial auto policy, you have the FDCPA cert, the professional bond, the MC numbers and operating authority in all the states you will be operating in. So, now what?
Examine your customer base within the service area you choose. How many "local" banks are there, how many "buy-here-pay-here" car lots, title loan companies, and how many branch banks are there.
Create a proposal for each potential client that includes your pricing, other services you will offer (skip tracing, update reports, condition reports etc) and all that insurance/bond/certifications/operating authority/etc/etc.
Contact the local banks first. You will ask to talk to the accounts manager, or a loan officer. Contact the local banks first because it is very likely that they are doing their own repossessions. It costs them, on average $200 for 2 bank officers to repo for 2hrs. If you see cars in their lot for sa le, they are more than likely doing their own repos. Ask to meet with them, or at least get your info to them somehow, email, fax, anything .... drop it off it you have to. Now contact the big banks. You'll find out you a just a little fish in a big sea, because those big banks use national repo agencies .... who you will subcontract with. Their requirements are HIGH - BUT - you already have them met because you purchased the right insurance, have the FDCPA cert, the Operating Authority, and the Professional Bond. The only thing you will probably be missing is a storage lot! The title loan companies and the buy here pay here places will try to low ball your prices, the national guys wont even haggle. They pay what they pay, and thats it.
Be prepared to spend money. If you are starting from the ground and building up you will need a minimum of $10,000.00 to get rolling, and expect to spend more depending on your needs. If you do not have this much capital to invest, stop now and find something else. I would recommend not spending any money until you have an accurate amount for all the items you are about to invest in.
Finally, know the laws in your state. Know what you need from the banks before you recover any of their assets. Know how to conduct yourself when you are in the field. Know what constitutes a wrongful repossession and a breach of the peace. Know the regulations on notifying the police before a repo, and most importantly know the area you service.
I could go on about where to advert your business, how to get a web site operational, where to get forms and manuals and so on and so on, but, if I spelled it all out for you - - - you would miss out on half the fun of starting your very own Asset Recovery Business.
Good Luck and Be Safe.