Understanding the Repossession Industry: Overcoming Transport Challenges and Boosting Efficiency

In the complex world of auto finance, efficiency is key—especially when it comes to transporting repossessed vehicles. Whether you’re an auto finance company, a repossession agent, or a vehicle transporter, optimizing this process can save time and money, and reduce operational headaches. This blog explores how to improve the efficiency of transporting repossessed vehicles, from pickup to auction.

Overview of the car repossession process

Before we dive into the transportation challenges, let’s quickly outline the repossession process:

1. Pre-repossession activities: Auto finance companies handle these steps, focusing on customer retention and attempting to resolve payment issues.
2. Securing the vehicle: Once a vehicle is secured, efforts shift to either returning the vehicle to the customer or preparing it for auction.
3. Vehicle transportation: Only occurs when the vehicle is moving to auction or back to the customer
   • Voluntary repossessions account for about 15% of repossessions, with or without keys provided by the owner. 
   • Impound repossessions account for about 10%. 
   • Involuntary repossessions account for approximately 65% of repossessions.  vehicles need to be transported to auction, while 30% are redeemed by the auto finance company’s customer.

“Repossession agencies are caught in a moral hazard crossfire. We’re outgunned by unfair contracts, tangled in compliance minefields, and fighting for survival, respect, and better industry safeguards.”

– Vaughn Clemmons, President of the American Recovery Association

Key players in vehicle transportation

Different stakeholders are involved in the transportation of repossessed vehicles, each with their own set of challenges and responsibilities:

• Recovery agents: Some agents are equipped to transport vehicles directly to the auction, but most prefer to focus solely on repossession.
• Forwarders/transport companies: They coordinate between multiple recovery agents and lenders to ensure regional coverage.
• Auctions: Often left to manage the transportation logistics, auctions may have agreements with specific transport companies.

Challenges in vehicle transportation

The transportation process is rife with obstacles that can lead to delays and inefficiencies:

• Communication gaps: A lack of clear, consistent communication between auctions, lenders and transport companies can lead to misunderstandings and scheduling conflicts.
• Qualifying phone calls: Essential data points such as the availability of keys, vehicle operability, and accessibility are often collected through phone calls, which are time-consuming and prone to errors.
• Pickup window constraints: Tight and inflexible pickup windows can result in missed appointments and canceled trips, especially for long-distance hauls.
• Inadequate equipment: The transporter will come with a rollback or a semi-truck or other equipment without knowing the exact location and condition of the vehicle. 
• Missed appointments and double bookings: Car haulers are busy and organizing calendars and schedules can be challenging. Missed appointments and double bookings can impact costs and timelines. 

Issues facing repossession/recovery agencies

These agencies bear a wide range of responsibilities, many of which go uncompensated. As the number of repossessions rises, so do the costs for repossession agencies. Despite this, the average fee for a standard repossession has remained stagnant since the 1980s. Meanwhile, the resources needed to reclaim vehicles and comply with legal regulations have grown significantly.

Video courtesy of the American Recovery Association (ARA)

The American Recovery Association (ARA) is the world’s largest association of certified, trained, and compliant recovery and remarketing professionals. With over 260 repossession agents operating from more than 500 locations, ARA provides services in over 27,000 cities globally. ARA advocates for its members on critical industry issues, provides education on impactful policy changes, and fosters essential relationships between the lending community and repossession agents. Discover more at www.repo.org

It’s important to note that a successful repossession only occurs if the vehicle can be located and safely secured, which only happens approximately one-third of the time.

• Limited resources of agents: One of the primary challenges repo agents face is the scarcity of resources. Agents want the vehicles moved, but their staff is tied up meeting with customers and recovering vehicles. Additionally, the lack of advanced tools and technology hampers their ability to perform tasks swiftly and accurately.
• Key-cutting difficulties: Recovering a vehicle often requires cutting new keys, a task that is not only time-consuming but also complicated by the frequent backorders from suppliers. This delay can stall the entire repossession process, causing frustration for both agents and clients.
• Demands from customers and tow yards: Repo agents face tremendous pressure from customers who expect quick and efficient service. At the same time, tow yards often have stringent requirements and limited availability, adding another layer of complexity to the transportation process.
• Accountability of recovery lots: Recovery lots are held accountable for the safekeeping of repossessed vehicles until they are transported to their final destination. This responsibility means they must ensure the vehicles are secure and in good condition, which can be quite difficult given the high turnover and volume of repossessed cars.
• Coordination between recovery agents and transporters: Miscommunications or misaligned schedules can lead to delays and additional costs. For example, if the vehicle condition is not accurately documented and shared with the transporter, the wrong equipment may be used, leading to potential vehicle damage during loading or transport. 

“Addressing today’s challenges collaboratively is crucial for the future of the repossession industry,” Clemmons emphasized. “Ensuring the safety of repossession agents and all team members is paramount as we navigate this demanding work.”

Leveraging data for better efficiency

Data plays a crucial role in improving the efficiency of transporting repossessed vehicles. Platforms like RDN (Recovery Database Network) offer valuable insights and data that can streamline the process:

• Online scheduling: Approximately 70% of recovery agents have online scheduling capabilities, making it easier to arrange vehicle pickups.
• Data integration: Tools like ClearData (for agents) and VinLo (for brokers/transporters) can facilitate better data sharing and coordination.
• Visual data: Pictures of the vehicle’s condition can provide transporters with critical information needed to prepare the right equipment and avoid unnecessary trips.
• Single data integration point: A potential partnership between RDN and AutoIMS is being discussed to create a unified data transfer system that would benefit all parties involved.

Steps to improve transportation efficiency

Here are actionable steps to enhance the efficiency of transporting repossessed vehicles:

Utilize technology

• Implement online scheduling systems to reduce the need for qualifying phone calls.
• Use data-sharing platforms to provide real-time updates on vehicle status and conditions.

Enhance communication

• Establish clear lines of communication between all parties involved, including transport companies, recovery agents, and lenders.
• Standardize data collection processes to ensure that all necessary information is available upfront.

Improve scheduling

• Offer flexible pickup windows to accommodate long-distance moves and reduce the likelihood of missed appointments.
• Use predictive analytics to optimize scheduling and route planning.

Streamline data access

• Invest in integrated data systems to provide seamless access to vehicle information.
• Encourage collaboration between data providers to create a unified platform for all stakeholders.

Train staff

• Ensure that all personnel involved in the transportation process are well-trained in using technology and data platforms.
• Educate them on the entire recovery process so they can play their role in the system.
• Promote best practices for communication and data sharing.

The electric vehicle market

It’s also important to look ahead and prepare for the future of the automotive landscape. As more electric vehicles enter the market, repossession and transport companies will face new challenges. Unlike traditional vehicles, EVs require special handling due to their high-voltage batteries and charging needs. Repossession agents and auto transporters must understand this new technology and be prepared to safely and efficiently transport EVs to auctions.

In conclusion

Improving the efficiency of transporting repossessed vehicles requires a multi-faceted approach that leverages technology, enhances communication, and streamlines data access. By implementing these strategies, auto finance companies, repossession agents, vehicle transporters, auto auctions, and car dealers can minimize delays, reduce costs, and provide better service to their customers.

Ready to optimize your vehicle transport process? Contact Montway Auto Transport to learn more about how we can help you streamline your operations and achieve better efficiency in transporting repossessed vehicles.