AutoNation Partners with Fair to Offer Subscriptions on Used Cars

A new twist on car subscriptions that makes used cars more accessible and flexible than existing car subscriptions

Subscription News: AutoNation Partners with Fair to Offer Subscriptions on Used Cars

Source: AutoNation

AutoNation, who claims to be America’s largest auto retailer, has partnered with digital subscription service Fair, a two-year-old startup, to allow qualified drivers to lease used cars on a monthly basis rather than buying or financing them on a long-term basis. Consumers use the Fair app, available for download in the App Store or Google Play Store, to get approval and shop for a car. Each car includes a limited warranty, routine maintenance and roadside assistance as part of the package. Insurance, additional miles and excess wear-and-tear protection can be added as extras and are bundled into the monthly payment.

Here’s how Fair works:

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With Fair, you can choose your monthly payment, based on your qualifications. and you aren’t locked into a long-term commitment. You can trade in your Fair vehicle for something else, or simply return the vehicle at any time with five days’ notice. Fair customers are obligated to continue the monthly payments for as long as they are driving the car.

Subscription News: AutoNation Partners with Fair to Offer Subscriptions on Used Cars

Source: Fair app

One thing Fair doesn’t spell out unless you dig for it, however, is that each car requires an upfront fee, called a Start Payment, to take delivery of the car. They mention it in their FAQs in the “How does Fair work?” question, but it is otherwise not mentioned, until you are shopping for a car within the app. Fair says the fee is based on the value of the vehicle, and it is due at signing to drive away. This fee is refundable within three days, or 100 miles, of signing for a full refund, provided the vehicle is in good condition. After three days, the fee is non-refundable.

This is a different twist on the car subscription services offered by auto manufacturers that have been growing in popularity over the last two years. With most existing car subscriptions like Hyundai, BMW and Volvo, you are limited to markets the auto manufacturer is currently serving, and the subscription usually limits the vehicles available through the program. Costs are higher than standard ownership or leases, but like Fair, they are typically all inclusive.

Subscription News: AutoNation Partners with Fair to Offer Subscriptions on Used Cars

Source: Fair app

AutoNation has more than 360 new vehicle franchises in 16 states, and they have access to more than 100,000 new and used vehicles. Their used cars include a CARFAX vehicle history report, 125-point safety inspection report, five-day or 250-mile money-back guarantee and a limited warranty. The company also prices its vehicles competitively by comparing thousands of vehicle prices to ensure fair pricing.

In addition to marketing to consumers, Fair is marketing its app to dealers. Currently, Fair has 2,985 active dealer partners, and as of yesterday, Fair had 31,617 cars available for subscription.

“Today’s consumers buy everything through their phones, even their next car. The Fair app allows them to pre-order a pre-owned or certified pre-owned car from your dealership, sign for it on their phone, and pick it up in person,” says Fair on the Dealers page of their website.

“Meet your customers more often. Fair customers can service with you, and we ask them to come back to see you when they’re ready to turn the car in. That means you build deeper relationships with happy customers,” adds Fair. “Fair doesn’t charge dealers for clicks, leads or customers. We also offer one business day funding on every transaction. To you, that means free customers. To us, that’s just Fair.”

According to CNBC, Fair has 20,000 customers already and is adding about 500 a week. The average monthly fee is $360 a month.

Insider Take:

Buying or leasing cars used to be the only options for getting a car, but car subscription services have provided new options for car “acquisition.” Until now, however, car subscription services applied to new cars and were limited by market and vehicle. Some of those services are doing well and expanding into new markets, while other services like Book by Cadillac, are already on ice.

With AutoNation and Fair, this is a whole new ballgame. In the subscription economy, people see the value in the convenience and appreciate the lack of a long-term commitment. Though only available in 16 states, Fair’s partnership with AutoNation is likely to help the company expand its reach. This will help those companies as well as dealers who are looking for new ways to reach customers.

From the consumer side of things, this appears to be a good deal, unless the consumer plans to trade vehicles out regularly. The start payments could become costly for a consumer who wants to change vehicles every few months, but they would have much more flexibility than a traditional car loan or lease would give them. We are eager to see how this works and if it benefits dealers and consumers the way it seems to do.