You can expect to see the Fair used-car leasing app roll out in the San Diego and Bay Area markets in California in coming weeks before rolling out nationally next year.
In an Oct. 23 phone interview, Fair president Georg Bauer said the San Diego launch was expected in about four weeks, with the Bay Area dealers beginning to work with Fair in six weeks.
As far as specific markets on a national rollout, Bauer said there was not a timetable yet. However, he said the launch areas would likely be places like Texas, Florida, the Tri-State area and the Midwest, and occur in the first half of next year
The interview followed two major investments in Fair that the company announced on Oct. 20.
The company said in that release that it was closing a BMW i Ventures-led strategic funding round that also includes investments from Penske Automotive Group, among other strategic investors.
Additionally, Fair has secured a total of nearly $1 billion in offers for dedicated capital coming from two entities: a group of institutional investment banks typically backing auto debt portfolios and a Sherpa Capital-led entity.
The latter entity is being developed to fund projects innovating the transportation industry, including ride-sharing and flexible ownership.
When asked during the phone interview if he saw entities like Penske implementing the Fair app into their operations, Bauer said: “That’s the plan of collaborating with the stores, nationwide, just as we have done now six weeks after our launch in the L.A.-area with our L.A. dealer partners,” he said. “Some of them have also invested … it’s a process of onboarding those dealers.
“They have realized,” Bauer said of Penske, “that Fair’s not only an exciting piece of technology put to use for the benefit of the consumer, but part of it also is a benefit for the dealer.”
He points to the fact that there are nearly 40 million used-car sales each year, the bulk of which are tied to financing that can stretch as far as 72 months.
That translates to years upon years of the consumer being out of the market.
With Fair’s flexible model, however, it creates “velocity in the used-car segment” for dealers, Bauer said, as consumers move out of those cars much more frequently.
In fact, Bauer said that with Fair, the same consumer would come back to the store at least two or three times during the time they would otherwise have been in a long-term loan.
Dealers are an important piece of the puzzle for Fair, as they are what the company described as “operational partners.”
In the news release announcing the investments, chief executive officer Scott Painter said Fair will utilize, for instance, Penske’s physical infrastructure.
“Penske is committed to be on the leading edge of technology, and our investment with Fair reflects that commitment,” said Penske president Robert Kurnick. “The potential appeal of the Fair app to consumers is compelling while keeping our company at the forefront of bringing mobility solutions to the marketplace.”
During the retailer’s quarterly earnings call, Penske chairman Roger Penske also discussed the Fair investment.
“We’ve invested $1.2 million, less than 1-percent ownership. We think this is an interesting startup,” he said. “You’re seeing GM and Ford and all these other people investing in some of these different business ventures and ideas, so we’re going to learn from this one and see if there’s any way that this might have an application to us at this particular time.”