How to Start a Repo Business in New Jersey

bizfluent article image

the late-autumn automobile image by Ivan Hafizov from Fotolia.com

Starting a repossession business, if you have the proper equipment and skill, can be a successful endeavor in the right environment. During tough economic times, many individuals have a hard time making payments on debts they owe on personal property such as vehicles or appliances. When a debtor fails to make several payments, the creditor will likely call the 'repo man' to pick up the item in question. Providing this service to creditors can be very profitable.

Register Your New Jersey Repo Business

Decide on the entity for your business and a distinguishable business name. Typical entity options include sole proprietorship, corporation, limited liability company or partnership.

Acquire an Employer Identification Number from the IRS. Even if you don’t have employees, this number is key in avoiding the use of your personal social security number when registering your business, opening a business checking account and business tax purposes.

Register your business online with the State of New Jersey’s Online Business Entity Filing service. This step isn’t necessary if you decide to make your business a Sole Proprietorship.

Use the online filing function to register your New Jersey repo business--regardless of the type of entity you choose--for Tax/Employer registration. You will need your EIN and business registration number.

Start Offering New Jersey Repo Services

Check in to the services and prices your competitors offer with their repossession businesses. It will also be beneficial to find out who their clients are so that you can offer your services to them at a later date.

Determine the services you will offer with your New Jersey repossession business and the prices you will charge for each service, keeping the competition in mind. While the repossession of vehicles is the most common service you can provide, additional services may include recovering furniture, appliances, boats and even farm equipment.

Purchase the equipment you will need to provide the services you decide on. Generally a truck is necessary, but you may need something with towing capabilities or a large moving truck to store several larger items. You may also need a storage facility of some kind to hold merchandise if you can’t deliver it to your clients immediately upon repossession.

Lease or rent office space. You can run a New Jersey repo service out of your home, but if you plan to have employees and offer several services to several clients at once, an office will help you to stay organized.

Visit potential clients to tell them in person about the services your new repo business offers. Be sure to have a service and price list available to give them. Promote your business to potential clients by visiting them in person. These clients may include banks, lenders, revenue offices, car title loan companies and rent-to-own centers.