Recession a boon for Grand Junction repo business
The Denver Post
GRAND JUNCTION – Armed with a GPS, a pack of Camels, two buzzing cellphones and a sheaf of 20 repossession orders, Brian Martin rumbles into a snow-clogged cul-de-sac and eases his unmarked truck past a silver Chevy sedan.
“There it is.”
A soon-to-be Chevy-less man traipses out into the snow as soon as Martin parks. He has made 36 of 60 payments, he tells Martin with a heavy sprinkling of expletives. But he has lost his job and can’t pay any more.
Such tales of woe are part and parcel of the repo business. And they are being told more and more often. Tough economic times, lost jobs, subprime loans, a downturn in the energy industry and even the Cash for Clunkers program that sent some consumers scurrying for new cars and a tax break are behind a repo boom.
“There has definitely been an increase,” said Joe Schmitt, president of the Rocky Mountain Repossessors trade group. “And most of the repossessions are easier today. They are willing to give up the car because they are trying to keep the house.”
Schmitt said he picks up 150 to 200 repossessions a month now at his Denver-based JLJ Auto Recovery business. When he started in the business in the 1990s, he picked up 25 to 30 a year.
The workload at A-1 Repossessions, owned by Brian Martin’s father, Bill, has more than doubled from this time last year. On some recent single days, A-1 repo men have picked up as many as 14 vehicles in Grand Junction alone.
They have also hauled off boats, RVs, 4-wheelers, snowmobiles, motorcycles and jet skis. There have been 300 to 400 repossessions a month this fall compared with 200 or fewer last year. Martin expects that number to drop some this month because lenders tend to give debtors a bit of a break at Christmas time.
But even more of a spike in repossessions is yet to come after the new year when bills come due on holiday spending and there is no money for car payments. When the four-month grace periods many lenders give nonpaying debtors is up on Cash for Clunker cars, more of those also are expected to give the repo business another bump.
Around the state, a sampling of the 56 repossession companies bonded through the Colorado attorney general’s office shows quite a few are experiencing a recessionary boost as lending institutions take back vehicles bought on credit.
Some repo businesses aren’t reaping the benefits of so many repossession orders because competition is increasing about as fast as bad liens. Eighteen new repo companies have been bonded in Colorado in the past two years. A decade ago, there were only 15 bonded repossession companies in the state.
Many of the new repo companies vying for bad-loan vehicles don’t bother with bonding and insurance. They see the “reality” show “Operation Repo” and think they will be getting into an exciting line of work where they can chase debtors, get into fights, and generally bend and break the laws that govern the repossession business.
“Whatever you see on that show – we don’t operate that way,” said Brian Derry, who tracks down bad debtors for repossession companies.
This surge in fly-by-night repo companies using questionable tactics has the Rocky Mountain Repossessors organization lobbying for stricter laws governing repossessions.
“There are too many tow jockeys out there taking the cheapest rate,” grumbled Herbert Goldstein, who has been in the business since 1957 and is seeing a big uptick in competition at the Repo’s Unlimited business he operates out of Colorado Springs.
To operate correctly, repossession businesses should be bonded and carry a hefty load of liability insurance. Even though they have the right to hook up a vehicle and haul it off, they can’t violate other laws in doing so, such as breaking into garages or getting into chases with debtors.
“We try to be as gentle as we can be. We’ve all been there,” Bill Martin said.
As for the excitement of being in the repo business: “Most of our day is driving around,” pointed out Brian Martin.
Driving around. Searching databases. Trolling through Facebook. Being on call 24/7. And being so unpopular you don’t want your picture in the newspaper.
“It can be pretty disheartening. It’s not a fun business at all,” said Bo Simon, owner of Western Colorado Recovery, where business is up about 220 percent over last year, but Simon wishes it weren’t.
“Everybody I pick a car up from says the same thing – ‘I just can’t find work,”‘ Simon said. “If you want to know the truth about it – if I had my pick, business would be slower.”
Derry said that in some cases lately, he has tracked down cars for repossession that people are living in.
That doesn’t change the mandate for the repo man. The job is still to hook up that car and haul it in for the lien holder.
“We’re like a dentist. We provide a service. We’re a fact of life,” Derry said. “But we don’t get many Christmas cards.”
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