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Collection Agency: Body Shop and Auto Repair Garage

Car Workshop

Automotive repair and body shop garages regularly face issues related to accounts receivable. Whether it is because a customer did not fulfill his obligation to pay or a delay/rejection of the claim by an insurance company. Past-due accounts can quickly erode the profits of an automotive workshop and even interrupt the smooth running of the facility.

If an Automotive workshop on a 20% profit margin, say 5% of their customers do not pay, then effectively 25% of their net profit is gone. Collecting money from existing customers is more important than getting new customers. Sounds unreal, but it’s correct.

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Besides the time required to generate new business, an automotive workshop faces many challenges. These include increased competition, certification requirements, integrated vehicle technologies, a limited number of skilled workers, paperwork, and higher expectations for speedy repairs despite a slower reimbursement process by insurance companies.

If a repair is being paid through an insurance claim, the garage must often navigate a complex process to get paid. This can lead to delays and increased administrative burden.

Relying on in-house staff, which are not adequately trained to collect the debt can be ineffective, time-consuming and costly. Transferring an account to a professional collection agency will reduce the staff burden and even result in higher recovery rates. Debt collectors are experts in collecting debt; after all that is what they do every workday. They ensure that the debt collection rules and regulations specified by the Federal and State governments are followed, minimizing the chances of a counter-lawsuit.

A collection agency will also do advance Skip Tracing, which helps to locate a debtor in case he has shifted from this residence. Services offered by collection agencies are usually diplomatic but can be slightly intensive if required. The two-step collection process offered by collection agencies is perfect for starting the diplomatic process initially and then using debt collectors or filing a legal suit to put more pressure to settle the account. Collection agencies can also report the debt to Credit Bureaus if you request them to do so. They drastically reduce the stress of debt collection for the owner and the staff.

Collection Letters Service
  • Upfront cost for 5 Collection Letters is about $15 per account.
  • Debtors pay directly to you, no other fees. Low cost option.
  • Good for accounts less than 120 days past due.
Collection Calls Service
  • Contingency fee only. No upfront or other fees.
  • Agency gets paid a portion of money they recover.  No recovery-No fees.
  • Best for accounts over 120 days. A debt collector calls debtor many times.
  • If everything fails, a possible Legal Suit if recommended by the attorney.

 

Filed Under: Debt Recovery

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    Note: Nexa is an information portal that helps businesses and medical practices to find a good collection agency at no cost to them. We are not a collection agency. We do not perform any collection activity, nor take payments, nor do any credit reporting. Leads shared with shortlisted agencies with Low Contingency Fee and High Recovery rates.

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