If you’re like most business owners and managers, you’re constantly on the lookout for ways to grow your revenue. Expanding a tow truck business into vehicle repossessions can be a lucrative move for business owners. You already have all the equipment needed to perform the work. However, it is important to understand the laws and regulations, insurance requirements, and employee training to mitigate risks associated with vehicle repossessions. Here are some tips to help you get started.
Laws and Regulations for Vehicle Repossessions
Before starting a vehicle repossession business, it is important to understand the laws and regulations in your state. Each state has its own set of laws regarding vehicle repossession, and it is critical to comply with these laws to avoid legal issues. Some states require a license to operate a repossession business, while others require a bond or insurance. Examples of other laws and regulations that may impact your business include:
- Breach of Peace Law: Most states, including New Jersey, have a breach of peace law. This means that when a car is being repossessed, the repossession agent cannot use force or threaten violence. If the agent does use force or threaten violence, they may be in violation of the law.
- State Code: Each state has its own set of laws regarding vehicle repossession. For example, a creditor may begin the repossession process in California after one missed payment. In Rhode Island, the creditor may repossess or disable the vehicle on your property without a court order if it can do so without breaching the peace.
Common Insurance Requirements
Insurance requirements for a vehicle repossession business differ from those for a tow truck business. Having the right insurance coverage to protect your business from liability is important. This includes liability insurance, garage keepers insurance, and workers’ compensation insurance.
- Liability Insurance: Liability insurance provides coverage for damages or injuries your business may be responsible for. This type of insurance is important for any business that interacts with customers or the public. Liability insurance can help protect your business from financial losses due to lawsuits or claims.
- Garage Keepers Insurance: Garage keepers insurance provides coverage for vehicles in your care, custody, or control. This type of insurance is important for businesses that store or service vehicles.
- Workers’ Compensation Insurance: Workers’ compensation insurance provides coverage for employees who are injured on the job. This type of insurance is required by law in most states. While you may already have workers’ compensation insurance for your towing business, you will need to talk with them about adding a new type of work–repossessions–to your employees’ job duties.
Training your employees is crucial to the success of your vehicle repossession business. Your employees should be trained in the laws and regulations of your state, as well as the proper techniques for vehicle repossession. They should also be trained in customer service, as they will deal with upset customers who have had their vehicles repossessed.
Tips for Expanding Your Business
Here are some tips for expanding your tow truck business into vehicle repossessions:
- Research the market: Before expanding your business, research the market to determine the demand for vehicle repossession services in your area.
- Hire experienced employees: Hire employees with experience in vehicle repossession to ensure the job is done properly.
- Invest in the right equipment: Take inventory of the equipment you already have. Invest in the right equipment, such as wheel lifts and tow dollies, to ensure that the job is done safely and efficiently.
- Develop a marketing plan: Develop a marketing plan to promote your vehicle repossession services to potential clients.
- Build relationships with lenders: Build relationships with lenders who may need your services for vehicle repossession.
- Stay up-to-date on laws and regulations: Stay up-to-date on the laws and regulations in your state to ensure that you are operating your business legally.
Collins is your partner for long-term business success.
Expanding a tow truck business into vehicle repossessions can be a profitable move for business owners. However, it is important to understand the laws and regulations, insurance requirements, employee training, and risks associated with this type of business. Collins can help with our easy-to-use towing dollies.
Collins has been an industry leader in the towing equipment industry for over 45 years. Our Hi-SpeedⓇ Dolly and Carrier Dolly systems provide towing professionals with lightweight solutions durable enough to get even large vehicles out of challenging situations and transport them safely wherever they need to go. Our products are designed with safety first to keep your employees safe while attaching and moving vehicles. Visit our website or call us to learn more about our products.