What Do I Need to Start a Car Repo Business in MA?
Massachusetts has specific laws and licenses that you must learn about before you can start a car repossession business. Also, you must invest tens of thousands of dollars on a tow truck and make connections with banks and other lenders in the state. The lenders will be your customers, as you will be towing vehicles that they want back because of unpaid loans.
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Licensing
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You must obtain several licenses and registrations before starting a car repo business. These include a tax registration and a federal employer ID number (EIN). You also will need business licenses from the state of Massachusetts and from your city or county, as well as any local permits required in your area of the state. You will need to register the name of your car repo business and incorporate your company, registering it with the state as a corporation, nonprofit, limited liability company or a partnership.
Tow Truck
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You will need a tow truck for towing repossessed cars. Recommended trucks include the Ford F350, Chevrolet 3500HD, Dodge 3500 Dually or a chassis cab truck with a self-loading wheel lift. Trucks can be bigger or lift more, but these can be used to tow most cars.
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Impound Lot
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You will need an impound lot at your car repo business. Vehicle owners have 10 business days from the time their cars are repossessed to make the back payments and pick up the cars in Massachusetts, so you will need a place to store the cars.
Specific Knowledge
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You will need to know the laws associated with car repossession, including the Uniform Commercial Act, the Federal Fair Debt Collection Act and the Rights of Defaulting Buyer under the Massachusetts Motor Vehicle Installment Sales Act. You can join a trade group such as The American Recovery Association to learn more about these laws.
Customers
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Hundreds of banks throughout Massachusetts lend to car buyers and may need cars repossessed. These lenders will be the customers for your car repo business. The will determine how much insurance you must carry and how quickly repossessions must take place. To obtain a list of banks, contact the Massachusetts Division of Banks at 617-956-1500. To make initial contact with a bank or other lender, call the bank and ask the loan department about the need for car repossession.
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