The Fair Flexible Model of Car Ownership

car ownership
Jim Fitzpatrick sits down with Georg Bauer, Co-Founder and President of Fair, a Fintech startup, to discuss auto finance and the Fair flexible model of car ownership.

Overcoming The Traditional Preowned Financing Model

The traditional model for financing used cars has been called very boring by Scott Painter a partner in the Fair venture. So what is boring about the current auto financing model, and what does Fair have to offer?

“In the digital age, we believe that what is right for innovation is customer experience and the financial solution – more flexibility. And that is what Fair is all about, making the change in customer experience in the frontline. And from an auto perspective we haven’t seen enough change over the past decades. Cars have become better, faster and safer, but customer experience barely changed,” Bauer says. “We look at the auto industry as the mobility of the digital age, and that’s really the mission of Fair.”

Future of Car Buying and Car Selling – The Digital Experience

Fair is offering the Fair digital app available on iOS for an easy to use digital experience where a customer can instantly get prequalified for a loan or a lease, get approved, and purchase a vehcile using their smartphone. Fair also offers a Fair Price Guarantee by offering only cars that are great deals, and the guarantee ensures that you won’t find a lower monthly payment with a comparable loan lease.

So, how does Fair help dealers sell more vehicles?

“We want to help dealers create more velocity in the used car sector. And Fair is an app that is Fintech based. A consumer can shop, get approved, and pay for a car in a completely seamless, paperless, end-to-end process,” Bauer says.  “So, it is as simple as: download the app, browse our extensive inventory across 30 brands, select your car, and sign with your finger on your phone, and you are done.”

The Fair Auto Model and Flexible Ownership

Fair does not own the inventory – it is dealer inventory.

“The moment the customer signs and purchases the car on the Fair App, we purchase the car from the dealer, wire the dealer the money, and the transaction is done,” Bauer says.

The price of the vehicle is determined by the range within the qualifying price for vehicles sold in the Fair app.  Dealers know where they stand in relation to Fair’s qualifying price for a vehicle.

“The driving mission of Fair is to give the customer the assurance that he or she gets a fair deal,” Bauer says. “Another part of Fair is that we are introducing flexible ownership.”

With the Fair model of flexible auto ownership, there is no long-term commitment. Customers can keep the car the length of time they determine, and return the car any time they are ready with five days’ notice. For customer peace of mind, every Fair car has a bundle, which includes a limited warranty, 24/7 roadside assistance, and routine maintenance. Also with Fair’s bundle option, you can add Fair insurance to bundle all of your monthly car expenses into one monthly payment.

Fair’s Win-Win Auto Financing Model

There are close to 40 million cars that change hands in the used car sector in the U.S., and these cars are typically financed by a 60-month to 72-month loan, which forces the consumer into a long-term commitment. With Fair’s flexible ownership model, they are creating a flexibility ownership model between the flexibility of a rental and the long-term commitment of a loan.

“We are introducing flexible ownership. You can keep the car six weeks, six months, or six years. This is unprecedented flexibility that is not out there in this space — in the used car sector, and that is where Fair is coming from,” Bauer says.

As incentive to the dealer, the contract is between Fair and the consumer. Once the deal is approved by Fair and the dealer, the dealer is paid and then the relationship is between Fair and that car buyer. The win-win is that Fair is creating no-fee, free customers for the dealer, and the new digital customer base loves the seamless, paperless process.