Why AutoNation is teaming up with Fair

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AutoNation Inc. cooperates with Fair, a leasing service for used vehicles, to offer customers a flexible lease option, the companies said Thursday. The collaboration is the latest of AutoNation's latest alliances with digital startups.

AutoNation, the largest dealer group in the US, will this month offer the service of Fair in its California dealers. The dealer group is likely to add it in the first quarter in South Florida and move on to other markets from there, said Marc Cannon, chief marketing officer.

On 30 October, AutoNation announced an investment of $ 50 million in Vroom, an online distributor of second hand vehicles, and in November 2017 it partnered with Waymo to provide maintenance and repairs to Waymo's fleet of self-propelled Chrysler Pacifica -hybrids. The partnership has since expanded. Now AutoNation offers a number of its customers Waymo instead of a loaner during maintenance appointments.

"We continue to look at opportunities because we clearly see how digital and other models are playing in the auto-store segment," Cannon said.

Via Fair, which was launched in August 2017, consumers can use a mobile phone app to close rental agreements for used vehicles without a lease contract. They scan their licenses to be prequalified for a series of monthly payments that include maintenance, warranty, insurance and roadside assistance. Instead of holding on to a two or four-year lease term, with a five-day notice period, customers can return their vehicles whenever they want.

Flexible option

The partnership will offer AutoNation customers an alternative to traditional ownership by offering a more flexible option, said AutoNation's CEO Mike Jackson in a statement. "From a dealer's point of view, this will increase the speed of the second-hand car company and at the same time improve our access to new customer groups such as millennials and Gen Z.", he said.

Fair has partnered with more than 3,000 dealers across the country, including three of AutoNation's Public Retailer colleagues: Penske Automotive Group, Asbury Automotive Group and Group 1 Automotive, said a spokeswoman.

Fair operates in 23 markets in 14 states and will have a national footprint by the end of the year, she said.

Compared to the car manufacturers' subscription program, Fair will appeal to a wider audience of consumers who want to lease cars from different automakers, Cannon said.

Fair also guarantees that the monthly payment is comparable to a monthly lease or loan payment for a comparable vehicle, Cannon said, compared to the premium many car manufacturers use for subscriptions.

Fair & # 39; s grid

Talks between AutoNation and Fair have been going on since June, Cannon said.

Georg Bauer, former CEO of Mercedes-Benz Credit Corp., is co-founder and chairman of Fair. He and Jackson worked together when Jackson was CEO at Mercedes-Benz USA.

"Mike and Georg go far back," Cannon said. "Georg is a fantastic operator."

Fair is led by Scott Painter, who, as the founder of TrueCar, quarreled with AutoNation in 2015 about the requirements of customer data. Former Tesla CEO Diarmuid O & # 39; Connell joined Fair as chief strategy officer this year. Bauer was in Tesla before he started Fair.