What's the Difference

When I meet new people or tell them what I do, they generally ask what I repossess.  When I tell them I repo airplanes, boats, RVs, construction equipment and other luxury assets, they ask if I do cars.  I don't.  They ask why.  What's the difference?  If they only knew...now they will.

In reality, there are many differences between repossessing a car and a luxury asset.  The differences range from insurance requirements to storage to pricing to skill sets and more.  In my honest opinion, a repo company either does cars or they do luxury assets.  Any bank that asks one to cross the line to the other, regardless of the assurances given by the company, is asking for trouble.  Now, I would rather a car company repossess a 55' Hatteras than have a yacht brokerage do it, but that's me.  And yes, that happens.  This is a very specialized field with a very specific skill set needed.  That is why lenders should allow the companies to stick with their strengths. 

The first thing to consider is how the company is set up. Remember, auto repo companies are local.  An auto company from Dallas, generally works in and around Dallas.  If you have a Ford F-150 to repo in Fresno, CA, you won't call these guys.  The luxury companies are set up regionally and sometimes, as is the case with IRG, internationally.  Our offices are in Orlando, Palm Beach, Philly and Houston.  Have a repo in Venezuela?  Yeah, we have repo'd there before.  Sure, we can get it.  Further, does the company have the things they need to adequately do the job and protect the lender?  Most auto companies have a secured yard for autos.  We have an airport, but no place for cars.  What about insurance?  We have a ton (over $10MM) of insurance to handle the much larger potential issues.  Licensing and bonding issues also arise when "crossing over".  There are many reasons to make sure you allow the specialists to continue specializing in their fields.

Another major issue is the tools and skills used to locate and care for the assets.  Cars can be incredibly difficult to locate because they are constantly moving and, in most cases, the agent cannot track the assets.  It is much easier to hide a Hyundai Elantra than a Gulfstream GIII.  Finding these takes a special skill that is honed and refined through experience.  Conversely, finding luxury assets requires more finesse in many cases.  You are dealing with FBOs and marinas and high end brokers and pilots on a consistent basis.  The skill needed to work with those folks is a very different one and also is honed and refined through experience.  The skills are different and the experience is different.  Any lender or insurer should take advantage of the company's skills and experience, not be the one who provides it. 

Finally, what happens to the asset after repossessing.  Remember, the only reason the bank agrees to do a self help repossession is to maximize their net return on the asset, thereby getting the cash back into the market for them to lend again and make a profit from.  It's pretty simple, right?  Almost every auto is taken to a fenced and secured lot, where it sits (for free in many cases) until the auto auction picks up the car to take to auction.  Luxury assets are handled very differently as we take custody of the assets.  We store them, care for them, clean them, maintain them and make recommendations for the sale.  We then sell the assets, as we are licensed brokers in Florida.  We advertise, show the assets, take the calls and handle the entire sales process for the lender.  I cannot imagine why a lienholder would not want this done by a professional, but it happens for sure. 

You see, the auto and luxury repo companies are very different and do different things.  This is probably the one area where the show has made things a bit difficult.  Many companies hear the numbers the show provides and think it is easy money.  They never consider how they will actually do the job.  It is critically important to make sure you hire the company that does the job you need done.  We have seen many negative outcomes for firms that don't use the right companies.  We see boats over 32' being sold in Florida without a license, which is illegal and will get the insurance company or bank in a lot of trouble.  We see companies get an insurance policy to get the business, then cancel the insurance once they have the business.  This happens a lot.  Lenders and insurers can verify our insurance at any time and they will be satisfied.  That won't be the case if they verify all of their vendors.   In short, if a lender or insurer truly wants to net the highest return on their assets, while staying out of the newspapers, do the right thing and hire the company who specializes in the job you need done.  It will save you every time.