What do consumers do if they need a new car but don't want to commit? The hassle of buying a car, obtaining a car loan, and committing to five or six years of paying it off. A lease might be a better, short solution but customers still usually have to commit for three years. Recently there has emerged a third option, monthly subscriptions.
Enter Fair, which is two-year old startup where you choose a used vehicle, get approved and complete the transaction — all on your smartphone app. The service falls somewhere between a long-term car rental, and a shorter term car lease. Today, Fair is available in 22 cities and 12 states, with plans to go national by year’s end.
“What we’re doing is giving mobility without going into debt with a car loan,” Fair founder and CEO Scott Painter told CNBC’s “On the Money” in a recent interview.
“Americans are already at a place where we understand that we pay for what we want to use,” he said, adding that Fair promotes the idea that a car “doesn`t have to require this big burden of debt.”
It’s an idea that’s already got some adherents in car manufactures like BMW, Volvo and Cadillac, all of which are testing their own auto subscription models that give customers more flexibility to acquire new vehicles.
Painter explained that Fair clients pre-qualify on the app by scanning a driver’s license. After selecting a car and linking a bank account, the used car can be picked up at the dealer.
“All the cars that are in the Fair app are located on dealer lots and we partner with dealers,” said Painter, the former CEO and founder of TrueCar and CarsDirect. “Fair actually acquires the vehicle once you select it, and then we enter into an agreement with you as our driver to subscribe to that car. So for dealers this represents a sale.”
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