An automotive market with one buyer per vehicle at one fixed payment is probably not the future.
At least that’s what David McClelland, vice president of marketing for Ford Credit, believes. That notion helped inspire Ford Credit Link, Ford Motor Credit’s pilot lease-sharing program.
The program will be launched next month at three Austin, Texas, dealerships: Covert Ford, Leif Johnson Ford and Maxwell Ford. The dealerships will enable self-organized groups of three to six customers to share a new-vehicle lease.
The program’s target audience is made up of urban consumers who don’t need a vehicle full time because of public transportation availability but would still like access to a vehicle.
The group of customers will approach the dealership together, but they will go through credit approvals individually. Ford Credit will make a decision based on the eligibility of the group as a whole.
“They’re individually approved but they’re collectively responsible for the lease payment,” McClelland told Automotive News. But the group, he added, decides how to divide the monthly payment among its members. For example, if one driver in a group of three drives the vehicle 60 percent of the time, he or she can pay 60 percent of the monthly payment, leaving 20 percent each for the other two members. Or the consumers can divide the payments evenly. The group would also decide how to divide the costs of F&I products they purchase.
The consumers also have a couple of options if a member wants to leave the 24-month lease early. They can find a replacement or they can absorb the additional payment.
After the consumers sign the lease contract, the dealership will install a plug-in that links with a mobile app. Through the app, consumers can make their payments individually and schedule driving time. They can select “quick drive” to access the car immediately or reserve the vehicle for a later date and time.
McClelland expects the program to boost leasing levels by attracting consumers who otherwise wouldn’t be in the market.
“The groups of people that we expect [to participate] probably weren’t buying a car today. They don’t have a need for a car themselves,” McClelland said.
That’s why Austin is the pilot area. “It’s got a good existing infrastructure and transportation system, which is important because these people need to use part of the lease and public transport,” McClelland said.
Relieving ‘mileage anxiety’
Meanwhile, beginning next month Lincoln Financial Services will pilot a lease mileage credit program called Lincoln Miles.
Lessees of 2015 and 2016 Lincoln MKX, MKC, and MKZ models who are up to date on their payments will be invited to track their mileage in real time through a mobile app and receive a credit for their unused miles when they turn in their vehicles. Each consumer will receive between $100 and $1,000 toward their next Lincoln lease or purchase.
“In the industry, [the term] “mileage anxiety” is pretty popular,” said Lee Jelenic, Lincoln’s director of future digital and product development. “We know some of the lease clients often worry, and we want to make it really easy for clients to know where they stood and reward them for the unused miles.”
Lincoln will invite its 4,000 customers who have 10 to 25 months left on their leases to participate in the two-year pilot.