At a recent industry conference, a veteran recovery agent chuckled as he reminisced, “I remember the good old days when we used a slide hammer to pull out the ignition. Back then, there were only a few key types—and we usually carried a replacement with us.”
Fast forward thirty years, and the landscape of vehicle keys—and the business that surrounds them—has changed dramatically. Many of us once believed there were just a handful of key types: transponder, laser, proximity, and specialty. We assumed that pre-approval equated to blanket authorization—simple, straightforward, and without questions. In reality, today’s keys come in an array of types and complexities, and crafting them requires specialized tools, training, and software.
The Problem: Misunderstood Pricing and Pre-Approvals
A common misconception in the recovery industry is that pre-approval means flat-rate pricing. For instance, if an agent’s rate for a proximity key is $350, it’s often assumed that all proximity keys should be billed at that rate. However, that’s not how pre-approvals are intended to function.
Pre-approval is meant to streamline the key-making process, minimize storage delays, and accelerate vehicle release—not to impose a one-size-fits-all pricing model. Not all keys—or key jobs—are created equal, even within the same category. A Dodge Charger proximity fob might be significantly less expensive and easier to program than an import fob requiring advanced programming and extended time.
The expectation that all proximity keys carry the same cost has led to widespread confusion and tension. Recall when the industry standard for a key fee was $500? That changed for a reason.
How We Got Here
The hard truth is—we contributed to the issue. Repossession companies often adopted flat-rate fees for keys without fully explaining the complexities involved. We failed to educate clients or peers on what drives pricing variations: differences in equipment, software, time, and expertise. Over time, this lack of transparency fostered mistrust and undermined the integrity of key pricing.
The post-COVID landscape added another layer. As large forwarding companies acknowledged that base recovery fees had become unsustainably low, they began encouraging agents to make up the difference through ancillary services—keys included. You may have heard the term “recovery bucket.” While that phrase may be used less often today, the concept persists. Agents were expected to absorb losses in recovery fees by padding services like key cutting, storage, or redemption—many of which have now been reduced or eliminated in forwarding contracts. This has placed disproportionate pressure on key fees as one of the last remaining areas to recover lost margins.
Forwarding, Invoicing, and a Broken Billing Culture
This issue is even more complex within the forwarding model, where repossession agents have been conditioned to “play” with billing structures just to meet client expectations. One forwarder may reject a mileage fee and request it be reclassified as an admin charge. Another may do the opposite—even if no mileage was incurred. Agents have even been instructed to bill for flatbed services in place of denied impound rate increases, regardless of whether a flatbed was used.
From a lender’s perspective, this may sound concerning—but the reality is that in most of these transactions, the forwarder—not the lender—is the client. In many cases, agents don’t even have the ability to adjust line items due to platform restrictions. We’re forced to select pre-defined codes that often misrepresent the actual work performed, simply to get paid.
While this doesn’t excuse questionable billing practices, it does explain how we ended up here. It’s a flawed system—especially when it comes to keys, where the services are already high-value and under increasing scrutiny.
Why Repossession Agent Key Fees Appear Higher
A frequent question from clients is: “Why are repossession agent key fees higher than those charged by locksmiths at auctions?” It’s a fair question, but the comparison is flawed.
Auction locksmiths operate under large-volume contracts, typically cutting dozens of keys at a single location. Their operations are streamlined, with minimal overhead and guaranteed workflow. Their pricing reflects this volume and efficiency.
Repossession agents, by contrast, operate in a decentralized, unpredictable environment. The costs of equipment, software licensing, insurance, compliance, and security are compounded by the inconsistent approval and billing workflows required by different forwarders.
Perhaps the most overlooked aspect of agent pricing is the administrative burden. Consider the process a recovery agent must follow for a single key:
- Submit a quote via the forwarding platform
- Wait for approval (which may be delayed or denied)
- Respond to clarification requests
- Re-submit adjusted pricing or service codes
- Provide programming proof, photos, or VIN validation
- Monitor communications for updates
- Complete the service and submit an invoice—hoping it’s accepted
Compare that to a national locksmith who simply cuts the key, submits a single invoice, and moves on. The cost difference isn’t just about cutting a key—it reflects the true cost of service delivery in today’s fragmented, high-touch forwarding environment.
ARA’s Collaborative Solution
The American Recovery Association (ARA) recognizes this industry-wide challenge and is actively addressing it. Through the ARA Key Process Committee, we’re working closely with lenders, forwarders, agents, locksmiths, and other stakeholders to clarify expectations and restore fairness.
A key milestone is our partnership with the National Automotive Service Task Force (NASTF). NASTF brings industry data, training, and standardized practices—exactly what’s needed to demystify the key-making process and align all parties.
Together, we’re working toward:
- Clearer definitions around pre-approvals and pricing
- Reasonable turnaround and communication standards
- Education on key types, cost drivers, and programming complexity
- Increased transparency and trust across the industry
Looking Ahead
We didn’t arrive at this point overnight, and the solution won’t come overnight either. But real progress is underway. If you’ve ever been frustrated by unclear key pricing, delayed approvals, or shifting expectations—you’re not alone. That’s exactly why ARA formed the Key Process Committee.
“These conversations aren’t about raising rates—they’re about restoring understanding,” said Todd Case, Chair of the ARA Key Process Committee. “By working together, we can create an environment where pricing reflects reality, communication is clear, and all parties—agents, forwarders, and lenders—operate on the same page.”
