U.S. app aims to make used-car leasing fair

Editor

November 27, 2017

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The Fair mobile app, launched about two months ago in the Los Angeles area and slated to expand to select U.S. markets in 2018, allows used-car buyers to shop, get approval, pay for a vehicle and then order a ready-to-pick-up model in as few as five minutes.

“We did a ton of surveys to find out where the pain points are,” Fair co-founder Georg Bauer tells WardsAuto during an interview. That research confirmed vehicle buyers consider it “really unpleasant to spend two or three hours at a dealership, being in the corner office with the F&I manager and having to deal with tons of paperwork, 15 signatures and 25 pages which the consumer doesn’t really understand.”

Bauer says ongoing studies by Fair researchers show an overwhelming 84% of automotive consumers dislike the traditional dealership approach to selling cars.

Consumers, he says, have told him “getting a car should be as easy as streaming a movie on Netflix – why not?”

Analysts call that a “car-as-a-service” business model, while Bauer, also Fair’s president, describes it as the long-awaited “disruptive change” needed by the auto industry to conform to the emergent digital marketplace and better meet consumers’ needs.

That was the mindset that led Bauer to team up with tech entrepreneur Scott Painter, founder of the CarsDirect and TrueCar auto-research and internet-sales sites, to establish Santa Monica, CA-based Fair, which recently announced it completed a round of funding from BMW’s iVentures, Penske Automotive Group, Mercedes-Benz and other investors.

Bauer, an automotive financial-services veteran whose 30-plus years in the sector have included top posts with Mercedes-Benz Credit in the U.S., global financial services for BMW Group and Tesla’s financial operations in the European Union and Asia Pacific markets, says he and Painter met about 1½ years ago and ended up brainstorming and strategizing about how Fair can move the customer experience and the financial solutions, as well as the ownership options, to a new level.

They settled on what Bauer calls Fair’s “affordability-based concept,” a streamlined, all-digital placement process.

As explained on the Fair.com website: a customer scans their driver license; runs their financial numbers online to determine the best monthly payment plan; chooses from a customized listing of available pre-owned vehicles (all within 6 years old and under 70,000 miles [112,700 km] and held at Fair’s roughly 80 partner dealerships); signs the leasing agreement; picks up the vehicle at the dealership; returns the vehicle whenever they want, then repeats the process.

Customers make a “start payment” every time they shop through Fair, with the initial amount beginning at about $1,000, based on their reported finances and price range.

Fair customers may drive their vehicles for as long or short a time as they want, provided they give at least five days’ notice. In other words, no fixed terms.

Bauer explains when a customer puts that first sum down on a Fair vehicle it usually helps them understand they are making an extended, albeit flexible, investment into their Fair ride, and not just looking to take it for a spin for a couple of days or weeks.

“We do not want to be considered a rental company,” he says.

Once the customer signs a purchase agreement through their mobile device, Fair buys and then keeps ownership of the chosen vehicle, although it’s registered under the name of the customer, who also assumes all other responsibility, aside from the limited warranty, roadside assistance and routine maintenance package offered with every Fair automobile.

 

Read more here

Editor

November 27, 2017

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.