Starting your own repo business can be a challenging but rewarding endeavor. Repo work is not always glamorous, and you will often deal with people in difficult and emotional situations. However, with determination and the right approach, the effort you put in will pay off as you build a successful and resilient business.
If you’re considering starting a vehicle repossession company but don’t know where to start, we’re here to help.
9 Steps to Starting Your Own Repo Business
If you don’t know how to start a repo business but are ready to learn, you’re in the right place.
1. Familiarize Yourself With Local Repossession Business Laws
Every state has different laws for vehicle repossession. Some states require you to follow a training course and pass an exam before starting the business. Others just need you to have a commercial driver’s license.
If you’re just starting, it’s a good idea to freelance for a larger company or apprentice with another repossession business while you learn the ropes. You’ll need your commercial driver’s license to get started, but the experience you pick up will serve your repo business well in the long run.
2. Get Your Financing Together
Starting a repossession business requires some capital upfront. Make sure you have your financing in order before you get started. You’ll need money for a tow truck if you don’t already have one, an office, your business name and license, insurance and bonding, and enough to cover any employee salaries.
Most experts recommend that when starting any new business, you should have enough capital to cover the cost of operations for about 6 months. While that might sound like a lot of money, you can apply for a business loan or seek funding from private investors to gather the funds you need to get up and running.
3. Apply for your Repossession and Business Licenses
If your state requires special licensing for repossession companies, now is the time to apply for that license. You’ll need your repossession license before you can obtain your business license.
You can move right to the business license if your state doesn’t require special licensing. Most business licenses cost between $50-$110. You’ll just need a business name to get started, which is the fun part! What will you name your business?
4. Establish a Location for your Repo Business and Lot
This step is one of the more difficult parts of starting a repo business. You’ll want a central location so your trucks can travel the shortest distance possible when picking up vehicles. You’ll need office space, room for a few desks and chairs, and a computer. If you plan to have a repo lot, it’s best to find a location with a secured lot.
5. Start Building Your Fleet
Most importantly, you’ll need something to tow those repo vehicles with. Start with at least one towing vehicle, or we recommend investing in up to three if you have the capital. The more trucks you have on the road, the more business you’ll be able to do.
Wheel lifts offer a convenient solution for maximizing your funds. Where tow trucks and wreckers are pretty expensive for any model, wheel lifts come at a lower cost of entry without sacrificing capability. They are an efficient, long-lasting, light-duty towing option that can handle anything your new repo business throws at it without the upfront cost of a wrecker or tow truck.
When you opt for a wheel lift, you’ll be able to fund more towing vehicles when you start up, which means you can tow more vehicles. That puts you one step closer to turning a profit as soon as possible.
6. Get Insurance and Bonding
With trucks, office space, and soon, employees, your repo business needs insurance. Your trucks will need to be insured to drive. You’ll also need property insurance for your office and lot. Liability insurance is also a must-have for repo companies to protect you if you get sued. Some states will also require bonding. Check your local laws to see if bonding is required for repossession companies in your state.
7. Establish A Business Plan
So, at this point, you have insurance, a business license, the tools, and the training to get started. Before you hire drivers and hit the road, take some time to establish a business plan. Having a plan will help you determine how much revenue you need to generate a month to keep your business afloat and get you started on the path to overall business growth and success. We suggest setting a few goals for your first couple of months, so you know what you’re working towards.
8. Hire A Team
If you plan to hire additional drivers, now is the time to do it. Look for qualified drivers with experience and a commercial driver’s license who seem like an excellent fit for your company. Remember, you’re starting with just a few employees — you’ll want to ensure they’re as dedicated as you are to making the business successful.
9. Get On the Road!
Your business is ready to rock n’ roll – congrats! You have everything you need to get your repo business off the ground. It’s time to get out on the road and start working.
Kickstart Your Repo Business with Minute Man Wheel Lifts
We wish you the best of luck starting your repo business. If you’re looking for a towing option that is durable, affordable, and economical, don’t forget to check out the Minute Man Wheel Lift.
The Minute Man Wheel Lift is especially beneficial for those starting a repossession business because it is easy to install, operate, and maintain. Its compact design allows efficient maneuvering in tight spaces, while its robust construction ensures reliable performance even under demanding conditions.
If you have questions or want to learn more about our wheel lifts, call us at 877-593-6959 or online.
Legal Disclaimer: The material and information contained on this website is for general information purposes only. You should not rely upon the material or information on the website as a basis for making business, legal, or other decisions.
