I'm doing a non-profit project at my University on the towing industry and I have a few questions. I think I've come to the right place and any answers or feedback would be greatly appreciated.
1) When someone has their car towed and cannot pay, what happens?
2) Lets say the owner of a towing company has "unpaid cars" on his lot because the car owners are unable to afford the towing fee. Does the owner of a towing company look at this situation as extra profit or are these "unpaid cars" a burden to him.
3) Are certain areas known for being unable to pay their towing debt (colleges, ghettos, suburbs, etc..)?
Thank you for your time, it's greatly appreciate!
Eric
Well I think I've found the information regarding question 1 and 2.
Basically, car gets taken to an impound. (1) Car owner has 30-90 days to claim the car. After the 30-90 days the impounding company has the right to auction off the car. (2) This would mean the impound would see an unclaimed car as profit rather than a burden. Is this right or am I missing something?
Also, I'm a little confused about this quote...
"Depending on the jurisdiction, 'the company that has provided the towing service' may either keep all of the proceeds from vehicle sales, or keep proceeds up to the amount of towing and storage fees and pay the remainder to the municipality or law enforcement agency."
Does this mean the company who towed the car has initial rights to auctioning off the car and the impound lot second? Or do the towing companies also own the impound lot, so they are one in the same. The full quote in context is shown at the end.
Thanks again 
FULL QUOTE
If the vehicle is not claimed within a period prescribed by law (typically between 30 and 90 days), the establishment has the right to complete lien proceedings and subsequently sell the vehicle at auction, or to a scrap metal facility, depending on the value of the vehicle. Depending on the jurisdiction, the company that has provided the towing service may either keep all of the proceeds from vehicle sales, or keep proceeds up to the amount of towing and storage fees and pay the remainder to the municipality or law enforcement agency.
Hi Eric, welcome to ITOW Talk.
I'll assume your question refers to police or private impounds since those are the tows that are performed without the owners consent and often go unpaid.
Keep in mind some states have different rules and regulations so this may only apply to Washington state.
1. When we impound a vehicle and it goes unredeemed, we are required by law to put the vehicle up for public auction. The vehicles owner cannot bid at this auction, so as to not create a loophole to avoid paying the full fee. Any proceeds collected at auction are applied to the outstanding bill and any shortage is turned over to collections against the registered owner. Keep in mind that unredeemed cars are unredeemed because they have little or no value. It's interesting to note that any overage (profit above our tow bill) is turned over to the state, and of the money that's sent to collections, less than only 1% is ever collected.
2. Unpaid cars are definitely a burden. We have invested equipment costs, drivers salary, storage room, various logistical costs, all into each impounded vehicle. Yet, if the vehicle is a junker some people will simply abandoned it in our lot.
3. Not in my area. There does seem to be more roadside abandoned vehicles in rural areas.
In regards to you second post.
In my state the vehicle owner has approx 30 days to redeem their vehicle. This time depends on how fast we get paperwork from the state. At no time would a car be in our lot more that 45 days.
I believe I've answered you other question above. Yes in our state lots and tow companies are owned together by law.
Hope this helps.
BTW: our tow regs are RCW 46.55 and WAC 204-91A
Thank you so much Bill!
This really does help me understand the inner workings of the towing industry.
Our non-profit idea is to allow easy financing for people who cannot pay their towing and impound fees. However, it seems that the people who don't pay their fees aren't paying them because they don't want their car. So having a service where they could borrow money to get their car back doesn't seem to be viable.
Do you, a professional in the industry, see this as a viable project to work on, or should we consider our other options?
Thanks again for your help!
Eric
I would say that's true on the West Coast where tow companies are privately owned and impounds are far less common. However, many cities on the East Coast have purchased their own tow trucks in order to perform parking enforcement, and their rate of impoundment has skyrocketed since that industry shift. Those cities impound hundreds of illegally parked, parking ticket overdue, but otherwise good running vehicles that the owners surely want to redeem.
There would definitely be a loan market there.
Awesome! We are located in Southern California so we will definitely look into this as a strong possibility.
Thank you for being an amazing resource. If we go through with this project I will make sure to site this forum as source and a reference.
Is there any last advice you can give us?
Thanks,
Eric 
Woops, I just re-read you reply and realized I missed read it.
So you are saying it would be more viable on the east coast as apposed to the west coast because the east coast has much more impounding compared to the west coast (sorry if my jargon is off).
Can you clarify this for me? Sorry...
That's correct. In the East, it's common for large cities to perform their own impounds. These cites have found a huge revenue stream in parking violation impounds.
In the West, there have been legal challenges to cities performing their own towing and cities in the West have not adopted this practice. Therefore, most impounds in the West are due to accidents and abandoned clunkers.
That's not say there is no viable business for you, but there would be far more need in the East.
Thank you so much for your knowledge and advice, this project would be near impossible without it! We are still going to look more into it and this is the base we needed.
Have a great weekend and God bless,
Eric