Buying a car can be a difficult experience. Scott Painter wants to change that.
Painter, former TrueCar CEO, now leads Fair, the company behind a smartphone-based app that lets customers lease used vehicles without long-term contracts or other ownership headaches.
Speaking at the J.D. Power Automotive Summit here, Painter said his company wants to push the boundaries of traditional car ownership the same way as other alternatives, such as subscription services. That's because customers want simple, cheap options that require no commitment, he said.
"This idea that customers are going to go through the whole process and borrow a big pile of money to then go out and buy a depreciating asset is what we think is obsolete," Painter said. "It's a new way to think about how to idealize the customer experience."
To lease a used car from Fair, customers download the app and scan their driver's license. Fair looks at their credit score, runs a fraud check and then offers them their pick of all-in monthly payments for vehicles that match their needs. The monthly cost covers warranty, standard maintenance and roadside assistance, and Fair also offers insurance.
Customers also pay a "start fee," which Painter said is equivalent to roughly three monthly car payments. That provides an incentive to keep the car longer, but they're allowed to return it whenever they want. He said the average user will keep it for 18 months.
Fair buys the vehicles directly from dealerships, which set the price. Once returned, Fair will offer the vehicles back to the dealership at wholesale price, resell it through the app or take it to auction.
The startup was founded about two years ago and launched its service roughly six months ago, Painter said. Fair has about 150 employees. He said Fair has raised about $1 billion in funding.
Painter is optimistic about the trend of vehicle subscription services and other alternative ownership models, which he said are often just new forms of leasing. He said dealers will continue to play a role.
"I think it's great for the industry," he said. "The industry seems to be sprinting toward how can you digitize the transaction? There's a really big change in how consumers access mobility and how they get a vehicle."
