BMW i Ventures, the entity set up by the BMW Group to help fund and invest in new start-ups with great potential related to the automotive field, made an investment in Fair, an online car-buying app that allows customers to secure vehicles online without a specific time commitment. The company was joined in this effort by the Penske Automotive Group Inc, and other investors securing almost $1 billion for the small company.
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Fair was started by Scott Painter and Georg Bauer, both former high-ranking executives in prominent businesses. While Painter was the CEO of TrueCar, Bauer used to hold the position of Head of Financial Services at Tesla and BMW AG. The way the app works sets it apart from the rest in that it allows consumers to prequalify for financing online, choose their preferred used vehicle according to their monthly payment range pick up that vehicle after putting money down and making the first monthly payment and then have the flexibility to return the vehicle to Fair at any time.
This way, prospective customers get to choose between a short-term rental program or conventional fixed-term lease or purchase, according to Bauer. “It’s not a loan, a lease or a rental,” he said for Automotive News. “The consumer can keep the vehicle two weeks, two months or six years. It combines the convenience of a rental but the low payments of a lease.” BMW i Ventures apparently was interested in the prospect and decided to invest in Fair.
The company was only founded in September and getting this kind of an investment will surely help them get on their feet. So far, being located in Los Angeles alone, the company already had about 200 customers. The way the app works implies the customers selecting a vehicle he/she can afford and completing an online authorization for monthly bank payments. Then Fair buys that used vehicle from a dealership by wire transfer and the customer can go an pick up the car within a day. The car can be returned at any time upon five days’ notice, and the client has no further obligations. However, Fair does keep the initial down payment. The cars that are returned are then sold back to the original dealership, to another dealer or at an auction.