Mercedes Benz and Harley Davidson Repo Fees get a Bump

The $1,200 Repo Fee That Not Everyone is Getting and the $800 Fee That Agencies Must Share with Their Agents

Late last week, Universal Investigative Group Inc. (UIG) announced to their partner network an exciting new change to their repossession fee structure launched by Mercedes-Benz Financial Services (MBFS). While they are offering $1,200 for repossessing some specific vehicle models, not every forwarder is passing this along to the agent networks.

On March 13^th UIG released to their agent network MBFS’s new altered all-in fee schedule for the repossession of their high-end vehicles such as Maybach, AMG’s and a number of the GL series vehicles. This fee includes Flatbed/Dolly, Mileage (up to 200 miles roundtrip), Personal Property & Redemption fees.

The vehicles listed as high-end eligible are;

A-Class AMG, GLE AMG, C-Class AMG, CLA AMG, GT AMG, S-Class, E-Class AMG, G-Class,1, SL-Class, EQE AMG, GLS, EQS, GLA AMG, GLC AMG, Maybach, GLB AMG

As far as their standard fees go, they are $400 with no additional fees.

Considering the high cost of these vehicles, it only makes sense. They are sensitive and easy to damage. The tiniest scratch could cost as much as $1,000 to fix and should one get totaled, the agency would be on the hook for over $200K in many cases.

This is a pleasant surprise that makes me wonder if they’ve been having issues with agencies turning down their work because of these risks?

But this unfortunately is not being passed down to agencies by all forwarding companies. I have also seen one other forwarding company who is only passing through $900 of this. I would not be surprised if there were others as well.

Harley Davidson

It was almost a year ago when Harley Davidson Inc. Vice President and Treasurer David Viney said on an investor conference call that their credit losses in the first quarter were due in part to a shortage of repossession agents.

He went on further to state that “Harley has accelerated efforts to reach customers in cases of late-stage delinquencies, and that the company is “making a lot of enhancements” to its repossession strategy. Those changes, combined with an expected seasonal recovery in credit losses, should help reduce the loss rate in the coming quarters,” he added.

Well, considering they wrote off $52.6M in Q1 of 2023, I’m sure they did make some changes, but the most significant campaign to bolster their struggling recovery ratios that I’ve seen didn’t come from them at all.

On March 13^th, Resolution Management Group (RMG) launched a campaign that offered extra incentives for their Harley Davidson Financial Involuntary Assignments. From then until the end of March they increased their recovery fee to $800.00.

This promotional fee includes;

$450.00 Repo

$200 Fuel

$150.00 Flatbed

This is reportedly not a Harley Davidson Financial Incentive and was offered directly by RMG under the request that the agency owners pass on at least half of the $100 incentive please go to your Repossession Agents for their efforts in the field. In addition, they are paying $200 for Door Knocks showing updates in RDN that result in the cases closing Paid Positive.

Considering the relative difficulty in recovering motorcycles, this promotional fee is actually a lot closer to where the standard fee should be all along. Regardless, it is a very noble and generous gesture by RMG, even as brief as the period is.

The Needle is Moving

I get a lot of mixed messages from agency owners about repossession volume and fees. Some agencies were complaining that their lots were too full to store anymore vehicles. Some were telling me that the volume gave them the option of turning down low fee or low recovery volume lender assignments.

On the flip side, I’ve been reporting pretty steadily on the steady rise in auto loan delinquency for months now and many are wondering why they aren’t seeing any significant increases in assignment volume? And then I see both significant and appropriate increases in repo fees like these.

With no reliable nation data on repossession volume exists, it is hard to say just how high the volume is. But with auto loan delinquency the highest it’s been in over ten years, it’s hard not to assume that it is very elevated.

As mentioned, it’s been over a decade since the lending world has seen delinquency so high. The moratoriums, mass loan extensions and modifications granted during the COVID-19 pandemic killed as many as 30% of the repossession agencies scraping to get by before it.

With the diminished pool of compliant repossession agencies remaining, these enhanced fees appear to be geared at improving recovery ratios for the lender. The question is, will this become a trend as repossession volume continues its ascent.

Hard to say, but after twenty years of stagnant fees, it’s nice to see some lenders and forwarders moving the needle.

Kevin Armstrong

Publisher