Cost of Owning an Auto Repossession Business
Looking at the Cost of BusinessThe auto repossession business is by no means a cheap business to be in. There are many costs that come to mind immediately and then there are some costs that I really have to think about. Those costs tend to add up quicker than you think. If you are going to be in this business, you need to keep costs down and shop around for the best deals on everything.
One of the largest expenditures in the auto repossession business is your wrecker. The prices for wreckers have shot up year after year and the pay per repossession has not gone up much. You are looking at spending close to $55,000 for a new truck. You need to decide if you are going to buy a new or used wrecker. The new truck will cost more per month, but a used truck may be broke down often and be costly to maintain and repair. Donít forget, that along with the cost of your new truck, you will be paying a hefty insurance bill to cover your new investment.
Repossession insurance costs are through the roof and if you want to have a repossession business then you will pay it. Your coverage will have to include at the least a one million dollar general liability policy with wrongful repossession insurance, a one million dollar aggregate vehicle liability policy for repossessions. This can not be just a tow policy because there is a difference. Other coverage may or may not be needed depending on the lenders you work for. This could include insurance for your storage lot and peopleís personal property, workmanís compensation, on hook towing coverage, drive away insurance, a million dollar per occurrence policy and a dishonesty bond. You can be looking at paying several thousands a year for this coverage.
Count Every Penny SpentAnother cost that you are going to have is you storage lot and office rent. Make sure you shop around and find a safe and secure storage lot at a decent price. This is a bill that you will be paying every month and not a one time thing, so you will want to keep you costs down. You will also have to pay bills for heat, electric, phones and maybe even a security system.
There are so many monthly expenses to running a repossession business and I will try not to leave any out. There is gas, maintenance and repair costs for every truck that you own. There will be the weekly salaries, taxes and social security contributions that you will need to make for everyone of your employees. Even if the banks are slow at paying you, your employees will still expect to get their paychecks.
There are the initial costs for computer equipment and software, copy machines and the monthly cost of maintaining them. There are monthly cell phone costs, phone service and long distance bills, internet provider costs and the cost to build and maintain a professional website.
There are some costs that are easily forgotten when figuring the expenses of running an auto repossession business they add up quick. This includes printer paper, ink, office cleaning supplies and other business related items that you will need to purchase.
As you can see, owning and operating you own repossession business can be costly. Before you take on this financial investment, I would advise you to figure out if it makes more sense financially to work for a company or start your own.