Most cars and trucks are purchased via financing today. That means that new owners borrow money from a financial institution of some sort to buy their vehicle and then make monthly payments until it’s paid off. These monthly payments are generally made up of a combination of principle and interest and, until the final payment is made, the lender will hold a lien against the vehicle. A lien is a legal concept which gives the lender the right to take possession of the vehicle if certain conditions aren’t met. One of the major conditions is if the owner of the vehicle stops making the monthly payments.
When a borrower stops making payments, the lender will usually make an effort to contact the person and resolve the issue. Usually this works, but if the loan reaches a certain state of delinquency, usually 90 days or more past due, the lender generally attempts to regain possession of the vehicle. This is a last resort for a loaner because the value of the vehicle has gone down, sometimes quite a bit, and the repossession itself costs money. Lenders don’t want to repossess automobiles but sometimes they have to. That’s where the “repo man” comes in.
Lenders hire repo men to find and retrieve vehicles. Repo men usually earn a standard fee per vehicle they repossess, though the fee may vary based on the value of the vehicle being recovered and the location. Sometimes it isn’t obvious where the car is and the repo person has to do some sleuthing. This is often because the owner has moved without notifying the lender of the change of his or her address. This is known as a “skip,” and the job of finding them is known as “skip tracing.” This task usually falls on the repo man. In general, a repo man can make some $200-$400 per recovery, although for larger jobs, such as boats or heavy equipment, the cost is often based on the weight of the item and the difficultly of removal.
Our friends at Fitzgerald Auto Mall of Lexington Park, MD, a Chrysler, Dodge, Jeep, Ram dealer, insist that making a living as repo man isn’t easy. For one thing, repossession is not as simple as finding a car and towing it away. In the United States, each state has laws that cover the details of repossession practices. In addition, there are licensing requirements and insurance costs involved. If a repo man works in multiple states, he or she will have multiple sets of paperwork to navigate. Plus, all repo men face the awkward situation (at best) of trying to take a car away from someone. This is practically never a calm situation.
A typical repossession starts with the repo man being contracted by the lender to locate and repossess the vehicle. He or she will usually obtain a copy of the paperwork in case the owner disputes the repossession, and then they contact the local police and inform them that a repossession is about to occur. Once the repo man locates the vehicle, he or she checks the vehicle identification number (VIN) to be absolutely sure it’s the correct car or truck; then, they hook up to the vehicle and head out.
After the repo is complete, the vehicle is usually towed to a secure storage lot. Sometimes, however, they deliver the vehicle directly to the client. Repo men often get paid soon after they deliver the repossessed vehicle to the lender. It’s just the way the business works.
