The American Repossessor

As a recovery professional, I often talk about how the industry has evolved over the past two decades. I haven’t seen a lot of positive changes, but I’ve seen enough to help me stay in the business. The existing sales model forwarding companies and auction houses have sold to the lenders has negatively impacted our industry by reducing it to being viewed as a commodity business. This has been harmful to the growth of our industry and detrimental to the survival of recovery agents’ businesses. I’ve commiserated with and listened to my fellow recovery agents speak of the countless ways the forwarding model has been harmful – to our industry, to them and to me. So, what I’m about to say may come as a surprise. I challenge every professional recovery agent in this industry to simply “let it go.” It’s time to let go of our continuous narratives of how this model isn’t fair—because whether we like it or not, our clients are still using it. The fact of the matter is, forwarders aren’t doing a better job than us – they’re just speaking the right language to lenders. Let’s stop complaining about how things are done and start embracing a better way.

In years past, recovery agents sold significantly more cars than they do today. As part of the recovery and re-marketing life cycle, clients would ask recovery agents to get bids on their vehicles. Recovery agents would appraise the vehicle, clean it, and get it ready to sell or transport it to a physical auction. Recovery agents would obtain a minimum of three bids and then forward that information to the client, who would then decide to either have the recovery agent re-market the car based on the bids or send it to an auction in the hopes of a better financial return.

Today, more often than not, when a professional recovery agent recovers a vehicle it is transported to a physical auction for resale. However, re-marketing a vehicle isn’t as simple – or as cheap – as it sounds. Transporting a vehicle to an auction house, plus additional fees – such as making new keys, physical auction fees, etc. – costs lenders hundreds of dollars per vehicle, per day. The longer the car sits on the auction lot, the more expensive it becomes for the lender. But here’s the important part for recovery agents — budget-conscious lenders don’t care if you can make keys better or have laptops in all your tow trucks or if you have A + rated insurance when you transport their vehicles to auction.

A few weeks ago I met with a lender whose single question for me was, “How will I get more ROI than I’m getting now by using your company instead of the one I currently use?” Just doing a “better” job repossessing and re-marketing cars isn’t enough anymore. To be a more successful recovery professional, we need to be smarter and truly understand lenders’ needs and what influences their decisions.

Recovery Management Incorporated (RMI) recently launched a program called RMI Liquidation Solutions. This solution takes advantage of the recent explosive growth of online auto auctions to save lenders tens of thousands of remarketing dollars per year. RMI’s Liquidation Solutions gives lenders the ability to have recovered vehicles inspected and sold online, while remaining on the recovery agent’s lot. Once an approved agent in the RMI network recovers a vehicle, Alliance Inspection Management (AiM) conducts a thorough on-site inspection using its state-of-the-art mobile technology. Even though the inspection is conducted at the recovery agent’s location, lenders can still be assured of an independent, third-party evaluation. Following inspection, lenders can auction the vehicle directly from the recovery agent’s location using OPENLANE – the industry’s leading online wholesale automotive auction company.

Online auctions are becoming increasingly popular because they consolidate buyers and create nationwide exposure for vehicles. Additionally, with online auctions such as OPENLANE, lenders have access to critical data, such as how many people looked at the vehicle, how often they looked at it and exactly how many bids were placed. For the bidder, online auctions provide the opportunity to quickly setup an online account and bid on cars without ever having to attend a live auction. Online bidders are able to view a detailed, independent third party condition report with multiple pictures and descriptions of damage and equipment. They can then submit bids 24 hours a day, 7 days a week – at their convenience. Instead of hoping they’ll find the cars they’re looking for at the physical auction, they can buy real-time to meet their daily stocking needs. They can even get instant transport quotes and arrange pick-ups online.

For lenders, the most compelling part of this model is time saved – the average recovery-to-liquidation time is just 15 days, less than half the time of the traditional physical auction model. Additionally, the RMI Liquidation Model provides lenders with a more cost effective solution and saves approximately $261 dollars per vehicle. Given OPENLANE’s current sales rate of more than 1,000 repossessions a month – this model is saving lenders more than a quarter of a million dollars per month. For independent agents participating in this superior model, the benefit is a published fee structure and the promise of continued business from lenders who have seen this impressive ROI delivered time and time again.

It’s time to take control of the future of the recovery industry by utilizing this partnering model. Instead of talking about what doesn’t work, let’s embrace what does work and benefit from it. The recovery industry needs professional recovery agents that are willing to incorporate these concepts and contribute their ideas to help ensure our industry survives and thrives in the 21st century.