Subprime loans drive repo man’s business
Repossession of cars hot market in uneven economy
CLEVELAND — The computer in the spotter car shouted “Hide!” and repo agent Derek Lewis knew that meant to keep driving like nothing happened. He’d just found another wanted vehicle. He was about to ruin someone’s day. Best not to draw attention.
It helped that he wasn’t in a tow truck, the stereotypical image of a repo man. Lewis drove a beat-up Ford Crown Victoria sedan. It had four small cameras mounted on the trunk and a laptop bolted to the dash. The high-speed cameras captured every passing license plate. The computer contained a growing list of hundreds of thousands of vehicles with seriously late loans. The system could spot a repossession in an instant. Even better, it could keep tabs on a car long before the loan went bad.
Now, Lewis had a live hit in a parking lot. He glanced at his laptop. The plate matched a blue 2006 BMW 325xi. He twisted in his seat. “It’s right there,” he said.
Technology has made the repo man ruthlessly efficient, allowing this familiar angel of financial calamity to capitalize on a dark corner of the United States’ strong economy: the soaring number of people falling behind on their car payments.
No longer tethered to a tow truck and able to use big data to find targets, the repossession industry is booming at an unexpected time. Although the U.S. economy recently entered its second-longest-ever period of expansion, the auto loan delinquency rate last year reached its highest point since 2012, driven by souring subprime auto loans. It’s evidence of how the economic recovery has not been evenly felt, with some of Americans’ biggest purchases — automobiles — being fueled by unsustainable borrowing rather than rising wages.
And the repo man has noticed the change.
“So much of America is just a heartbeat away from a repossession — even good people, decent people who aren’t deadbeats,” said Patrick Altes, a veteran agent in Daytona Beach. “It seems like a different environment than it’s ever been.”
Repo agents are the unpopular foot soldiers in the nation’s $1.2 trillion auto loan market. They don’t make the loans or issue the repossession orders that, for some high-risk customers, can come as soon as a single payment is days late. But they are the closest most people come to a faceless, sophisticated financial system that can upend their lives.
Lewis rolled to a far corner of the parking lot, next to an apartment building overlooking Lake Erie, and called the BMW’s lender.
“I’m sitting on a live hit for you,” he said.
He texted for a company tow truck. It was seven minutes away.
He sat in silence, one of the few times his spotter car wasn’t logging new plates, each one trumpeted by a video-game-like bing. The system picked up passing cars. Parked cars. Cars stashed in driveways. As many as 10,000 every eighthour shift.
Lewis works for Relentless Recovery, the largest repo company in Ohio and its busiest collector of license plate scans. Last year, the company repossessed more than 25,500 vehicles.
Business has more than doubled since 2014, the company said. Even with the rising deployment of remote engine cutoffs and GPS locators in cars, repo agencies remain dominant.
Relentless scanned 28 million license plates last year, a demonstration of its recent, heavy push into technology. It now has more than 40 cameraequipped vehicles, mostly spotter cars.
Agents are finding repos they never would have a few years ago. The company’s goal is to capture every plate in Ohio and use that information to reveal patterns that will aid in repossessions.