Repo service prices are forecast to drop slightly as consumers become less likely to default on loans
Los Angeles, CA (PRWEB) December 30, 2014
The repossession services market has a buyer power score of 3.6 out of 5, which reflects a considerable advantage for buyers in the market. With a high buyer power score, buyers are afforded more leverage in negotiations and better pricing terms, as well as favorable pricing and quality trends. The repossession market is highly fragmented, with suppliers preferring to cater to their local clients rather than expanding nationwide. “State-specific regulations and the importance of local expertise effectively keep the market fragmented,” says IBISWorld research analyst Scott Winters, “preventing any single supplier from gaining an unfair advantage over buyers.” Furthermore, a low market share concentration allows buyers to compare multiple suppliers in their area, which gives them more negotiating leverage and lower prices.
During the past three years, economic growth has pushed demand for repossession services downward, reflecting the counter-cyclical nature of the repossession market. As demand wanes, prices are anticipated to decline in the coming years. This trend is expected to have low volatility, which will result in stable pricing across the market rather than large gaps in pricing among suppliers. “A stable decline in prices is extremely beneficial for buyers,” says Winters, “because it opens up negotiating opportunities and puts added pressure on suppliers to come down on price.” A lack of switching costs and long-term contracts also boosts buyer power. Buyers are free to change suppliers as often as needed, representing another powerful negotiating point.
However, there are notable factors that reduce buyer power. First, the low availability of substitute goods puts a damper on buyer negotiating power despite the abundance of potential suppliers. Also, the need for extensive research and preparation required for each vehicle increases costs significantly while extending lead times. In fact, the time needed to perform a repossession can vary significantly, depending on the vehicle owner's level of cooperation. Lastly, pricing models vary between suppliers and sometimes incorporate hidden fees. A lack of standardized pricing significantly hurts buyer power and makes it more difficult to compare suppliers. For more information, visit IBISWorld’s Repossession Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of repossession services. Repossession services include voluntary or involuntary recovery of property used as collateral in a loan agreement. Repossession service suppliers typically specialize in recovering motor vehicles such as cars, trucks, SUVs, boats or recreational vehicles. Suppliers use a variety of methods to recover property, including lock picking, forced entry and towing. Many suppliers also offer related services such as locating debtors known as skip tracing, transportation and remarketing recovered property. This report focuses on repossession services and does not include towing services or other debt collection services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors