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I know there is sometimes a lot of negative talk among repossession agents and repossession company owners when the subject of working for Buy Here Pay Here car lots comes up. Personally, when I owned my company, I never actively pursued used car lots for business. I say that I did not go after their work, but I did do work for two BHPH lots. Both of these used car lots were owned by friends of mine, and not only did we do their repossession work, but we also did their auction transports and towing. They both paid very well and were not resistant to paying for extras such as investigative fees, mileage, cutting keys, delivery and even a close fee. Both accounts had a pretty good handle on the whereabouts of their debtors. Both of them could have done their own repos, but chose to farm them out to me because they did not have the time, nor did they have the desire to deal with angry debtors. I had many other BHPH lots approach me to do their repo work, but I was too busy to accommodate them, and I also only took the other two car lot accounts on because I knew the owners. I knew they did not do any underhanded deals, and they knew what I expected.

After I sold my company, retired and then started, I really never thought much about car lots and their repossession work, other than what I read on the forum when our members discussed the subject. The last few months, in my talks with auto repossession company owners, the subject seems to always come up. I am finding, because of the current soft auto repossession market with lenders, that more and more companies are doing a heavy volume of repo orders with BHPH dealers. Lenders are not writing paper like they used to, but the reports I am getting are that the used car lots are rolling the paper out.

When the conversation comes up, I fully expect to hear that these accounts are dead-end repo orders, dangerous, and pay $150.00 a car. However, I was surprised to hear that although there are some dead accounts, the used car lots are often paying better than some lenders. I am also told that they are willing to pay for extras without putting up a fight. One repo company owner told me, “It’s because they have a smaller volume of accounts than a lender will have, and it is very important for them to get their collateral back. They take their accounts more seriously than a lender that has 10,000 cars out there”.

I was also told that there are so many used car lots out there with repo work, that a repo business owner can often pick and choose whom to work for. The good-paying accounts with decent paper are the accounts they keep, and the car lots that haggle on price and have terrible paper are the ones they dump.

In a conversation I had this week, a company owner said that he loves the diversity in his accounts and BHPH’s add to that diverseness. He has some large and small finance companies, some local banks and credit unions, some title loan accounts and a slew of BHPH clients. He says that the client diversity protects his business because “all of his eggs are not in one basket”. He can afford to drop a client, or even be dropped by one, without being thrown into a financial skid that would result in a huge revenue loss, if he were dependent upon one main client.

Another thumbs up that the BHPH car lots are getting is that there is no waiting to get paid. Oftentimes, the car lots are paying in full when the unit is dropped off and sometimes even paying the repo fee in cash! “This helps keep the cash flow rolling into the business until the slow-paying finance companies decide to cut a check”, according to one repo business owner.

I am linking this article to a thread in the forum, rather than having comments here, to see what input you all have on Buy Here Pay Here accounts. Please click here to discuss.
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