How to Get a Repo License

Starting a repo agency or working as a freelance repo agent are great ways to start a career where you’re fully in charge and autonomous. When you own a business, you set your own hours and you call the shots. Like any job, vehicle repossession requires training to ensure you can complete the necessary tasks efficiently, profitably, and according to the law. If you’re interested in starting a repo business, you’ll need a repo license. 

How to Get a Repo License

The rules and regulations for obtaining a repo license vary by state. Some states only require a high school diploma or GED. Other states require that you pass an exam. Since every state has different requirements for obtaining a repo license, it’s a good idea to check with your state’s Department of Licensing and Regulatory Affairs. 

Since MinuteMan is headquartered here in Michigan, we’ll walk you through the steps necessary to get a repo license in the State of Michigan. If you don’t live in Michigan, you can take a look at these requirements as guidelines, but it’s always best to check directly with your state’s department of licensing for specific information. 

Steps to Getting a Repo License in Michigan

In Michigan, to obtain a repossession license, you must: 

  • Be 18 or older
  • Have a high school diploma or GED
  • Have 6 months experience working in repossession
  • Pass a state exam
  • Obtain a surety bond for at least $5,000

Let’s break down some of the more specific requirements: 

6 Months Experience in Collection or Repossession

Before you can apply for a repo license, the State of Michigan requires that you have at least 6 months of experience working at a collection agency or repossession company. The purpose of this experience is two-fold. 

First, the experience helps ensure that when you are granted a repo license, you’ll have some familiarity with the industry and with the job. 

Second, if you have been working for 6 months in repossession, it’s assumed you have your commercial driver’s license or CDL. A CDL is required to drive a tow truck. With at least 6 months of experience towing, the state feels comfortable granting you a repo license. 

If you plan to start your own repossession company, it’s a good idea to apprentice or freelance with another agency until you feel comfortable doing the work on your own. 

Obtain a Surety Bond

A surety bond covers you in the event that you’ve been paid by a client, but you cannot fulfill your contractual obligations. In general, the state of Michigan requires that you get a surety bond for at least $5,000, though it can vary by year. It’s always good to check with the Michigan Department of Licensing and Regulatory Affairs (LARA) for up-to-date information. You’ll also be able to find a list of insurance agencies that provide this type of bond on the LARA site. 

Pass a State Exam

In addition to meeting all of the requirements for a repo license, in Michigan, you’ll also have to pass a state exam after you submit an application for your repo license. The exam functions to ensure you have the training you need to be successful as a repossession agent in the state. Most state repossession exams cover information about state laws on repossession as well as common training you’ll likely have learned in your 6 months on the job.

Apply for Your State Repo License

Once you have fulfilled all of the application requirements (except the state exam), you can submit your application for your repo license. You can do this through the LARA website. If you plan to become an owner/manager of your agency, you’ll need to include the $225 license fee with your application. For non-owner/manager licenses, the fee is only $85. 

Once you’ve submitted your application, you can register for the licensing exam, choose a date and location for your exam, and take it. Once you pass the exam, you’ll be well on your way to starting your new repossession agency!

What Happens When You Have Your Repo License?

After you pass your state exam and receive your repo license, you’re able to complete repo work according to the type of license you applied for. For example, with a non-owner/manager license, you’ll be able to complete repo work as the manager for another repo company. 

If you have received your owner/manager repo license, make sure you have applied for a business license as well. These are typically easy to apply for and inexpensive, requiring a fee of around $50-60 and a business name so you can get your company registered. 

With your repo license and business license in hand, you’re ready to hit the road! Make sure you have all of the towing and skip tracing equipment you need, and you’re set for your first job. 

Starting your own repo business? You’ll need a tow truck you can trust! The Minute Man slide in wheel lift provides all the functionality and durability you need, without the bulk and noise of a wrecker. Contact the Minute Man team online, or call us at 877-593-6959 to find out more about how this slide-in wheel lift can help your new repo business.

Legal disclaimer: The material and information contained on this website is for general information purposes only. You should not rely upon the material or information on the website as a basis for making business, legal or other decisions.


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