Start a Repossession Business
A repossession business is called in by lenders or leasing companies to repossess cars when owners default on their payments, or in the case of renters, when rental cars aren't returned on time. If you've got a talent for organizing and aren't intimidated by potentially tense situations, learning how to start a repossession business could provide you with a way to open a lucrative company. Read the following steps to find out which legal and organizational measures you need to take in order to make your repossession business a success.
Steps
- Determine which legal requirements you need to meet in order to start a repossession business. The repossession business follows strict rules, and you must have a good understanding of the laws that govern this type of business in order to avoid mistakes.
- Spend time working as a repossession agent for an established repossession business to learn the trade. In many states and countries, it is a legal requirement to have proven experience in the industry before you may apply for a license to start a repossession business. Even if these licensing requirements don't apply, it's useful to know as much as possible about repossessing before entering the business.
- In some locations you have to follow an accredited training course and pass a state exam before you may apply for a license. Contact your local department of transportation to find out which rules apply to you.
- Construct a business plan that includes the costs of starting a repossession business, insurance, employees, and marketing.
- Raise the necessary capital by applying for a business loan or getting funding from private investors. You'll need a sum that can cover the cost of operations for the first 6 months.
- Register your repossession business with your city to receive a business license.
- Choose a location for your repossession business. You'll need an office space, as well as a secure parking lot or garage to store repossessed vehicles.
- Make sure the parking lot or garage has a good security system, preferably with a live guard as well as an armed response team.
- Purchase liability and property insurance for your repossession business.
- Liability insurance protects your business in the event that you're sued.
- Property insurance protects your equipment, as well as any stored vehicles, in the event your location is damaged or destroyed due to vandalism, crime, fires, or natural disasters.
- Buy at least 1 tow truck. If your start up capital allows, it's best to have at least 3 flat bed trucks with wheel-lifts to avoid damages to the vehicles you repossess.
- Interview and hire employees who are experienced, capable, and have clean records.
- Advertise your repossession business with mailing and email campaigns that target lending and leasing companies, as well as ads in local publications.
Things You'll Need
- Repossession license
- Business plan
- Capital
- Business license
- Location
- Security system
- Liability and property insurance
- Tow truck
