The Future of the Industry: Are dealerships going digital?
A new app is promising to take you from car search to possession, all within their platform, with no long-term commitments, and many services included. Fair claims it’s monthly subscription service will remove the need for long-term lease or loan contracts, making the car-acquiring experience closer to that of a month to month phone contract; low risk and no ownership involved. Fair doesn’t claim to remove the need for dealerships as it services relies on contracts with local dealerships to actually provide you your vehicle, but if this model takes off, it could revolutionize dealership operations.
Fair applies the Uber model to car ownership: pay for what you use and never own. This no-commitment service includes warranties, roadside assistance, routine maintenance, and insurance options, and claims to remove all the worry and hassle of the traditional car-acquiring process. Some have pointed out that adding another middle-man and removing commitment means customers end up paying a bit more month-to-month, but Fair says it’s well worth it for the freedom and ease of use.
Will it work?
Currently, Fair is in its business infancy, but they plan to expand to all 50 states by the end of the year. Public reception has been great, and the trends outline a trajectory of success. What does this mean for dealerships? Say over 50% of people looking for a new car choose to use Fair’s (or comparable competitors) service: in the short term, dealerships could experience a boost in business if they’re partnered with one of these companies, although we don’t know the specifics of Fairs dealership contracts. In a more gloomy possibility, rising profits could mean Fair-like services could acquire and own their fleet of vehicles and provide services in-house. So what’s a dealership to do to prepare for either possibility? Get involved, and stay up to date. Look for ways to partner with existing services, and explore ways to attract consumers who are looking for the no-commitment models.
Keep in mind there will always be a market of those who want to own their cars, either because of a rural location or a pride in ownership. It may be worthwhile to invest more in targeting these buyers specifically.
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