3 findings from ARA survey about vehicle storage costs
American Recovery Association executive director Joel Kennedy recently reported findings from an industry survey about vehicle and lot storage costs.
Kennedy explained that ARA is examining this entire category of expenses that includes everything from rent, security, insurance and staffing.
ARA’s survey indicated:
• 71% of respondents have between 1-3 vehicle storage lots, and over 50% of those agents lease their lots
• 40% of agents who lease their lots reported that their rents increased by more than 10% in the last two years
• Two thirds of all agents responded that their lots can accommodate a maximum of 200 vehicles at any time
• 80% of respondents reported that, on average, vehicles remain on their lots between 10-30 days
“Vehicle storage is a big expense category, and it is a common to all of our members,” Kennedy said in an industry message. “Also, and more importantly, revenue from vehicle storage has been shrinking due to lower negotiated daily storage fees and free storage periods. A recent uptick in arson attacks at recovery agent lots has been another hit to already thinning insurance carriers and increasing premiums.”
Kennedy then noted ARA sees three potential solutions to help agents, including:
1. Expand existing agent lot capacity, since the likelihood of new agencies starting up is low
2. Accelerate the movement of recovered collateral from recovery agent lots
3. Address fair storage fees, and eliminate free storage from contracts
“The ARA thanks its members and the industry for their participation in this survey. The sole purpose of this survey is to put numbers to what we already know and provide that data to the industry at large,” Kennedy said.
“We are committed to building a sustainable and profitable business model that benefits every stakeholder in our industry and, it is our opinion, a conversation about this topic and daily storage rates is paramount if things are going to change,” he continued. “We are aware that without an open discussion about how to accomplish this goal, we will see even more agencies depart our space.”