How to Start an Impound Business

by Shanika Chapman; Updated September 26, 2017
Tow Away Zone

When a car is abandoned or illegally parked, business owners or police officers may have the vehicle towed. Individuals may also choose to have a junk car removed via an impound business. In some cases, financiers may order a vehicle to be repossessed. Impound companies impound--seize and hold--a vehicle and either store it on the company property or return the car to the dealer. Impound equipment is expensive and you will likely require financing to start a company, so start with a business plan.

Items you will need

  • Location
  • Security fence
  • Video surveillance
  • Locks
  • Repossession license
  • Qualified drivers
  • Flatbed truck
  • Tow truck
  • Wrecker
Step 1

Establish a service radius and determine what services you want to offer--consider offering repossession services, towing and lock-out assistance, roadside assistance, junk car removal and abandoned vehicle removal.

Step 2

Secure a location for your business and install a fence and lock to prevent auto theft. Purchase and install a video surveillance system.

Step 3

Apply for a collection agency license or repossession license with your state’s repossession agency or bureau of consumer credit, if necessary. Learn your state’s rules and your rights for repossessing a vehicle.

Step 4

Purchase a flatbed truck, tow trucks, wreckers and attachments. Implement a GPS navigational system on each vehicle.

Step 5

Hire drivers with clean records who hold CDLs (Commercial Driver's Licenses), vehicle removal specialists to consult with clients wanting to have their junk vehicles removed, and qualified and licensed employees to conduct repossessions.

Step 6

Implement a system for cataloging your vehicles.

Step 7

Establish relationships with local police, used car dealers, car financiers, car loan companies and car rental agencies.

Tips

  • Contact mechanics or owners of scrap yards near your location to inquire about selling parts from unclaimed vehicles.

About the Author

Shanika Chapman has been writing business-related articles since 2009. She holds a Bachelor of Science in social science from the University of Maryland University College. Chapman also served for four years in the Air Force and has run a successful business since 2008.

Photo Credits

  • Ryan McVay/Photodisc/Getty Images