For years, independent and buy-here, pay-here dealerships did business with customers who might work multiple jobs or use their income tax return as funds to put toward a down payment. New ways are arriving for those operators to still do business with those individuals even if one of their sources of income disappeared or their cash injection from the Internal Revenue Service softened.
About a year ago, the National Independent Automobile Dealers Association (NIADA) entered into a strategic partnership with DriveItAway, a current NIADA National Member Benefits partner.
DriveItAway can provide NIADA members with the tools to offer a subscription model car sharing platform. The partnership with DriveItAway adds seamless turnkey self-service software, all insurance coverages and training to allow dealers to quickly and profitably add a cents-per-mile model to the traditional one car sale/one profit scenario.
NIADA members using DriveItAway’s turnkey program can also offer the Lyft Your Down Payment program, which provides new Lyft drivers with immediate temporary vehicles to drive at a daily or weekly rate as a path to ownership, allowing them to raise money for a down payment to buy the vehicle of their choice — offered by the participating dealership.
BHPH Report caught up with NIADA senior vice president of member services Scott Lilja this spring to get an update on program success and what kind of lift — pun intended — dealers are experiencing.
“There’s definitely a possibility there,” Lilja said. “Really it drives a whole new customer base to our dealerships that in many cases they might not have been serving. That customer, the Lyft driver and the perspective Lyft driver, those are only going to grow exponentially over the next few years. There are millions of them already and millions more to come.
“We see it as a great new sales segment and as a way to drive sales growth and inventory turn,” he continued. “I think the other thing is it gives our dealers a chance to test the waters around this Mobility-as-a-Service industry and get a little flavor for how it works to get them more comfortable in an area of the business that is only going to continue to evolve and become a bigger part of the auto retail sector. We’re giving them some tools, education, resources and ways to get started that are not really expensive and fit into their current infrastructure of their operation to make it a seamless process to get started and up and running.
“Our charter is to help dealers evolve, grow and stay relevant in an ever-changing marketplace,” Lilja went on to say. “This is one of those areas where there are some new trends coming at them, a new customer base and how they want to transact business is somewhat different. Sometimes it’s a challenged customer base from a credit scoring perspective. We’ve created some tools that can help them repair that credit history and help them get up and running as a Lyft driver and be successful.”
DriveItAway founder and chief executive officer John Possumato described how the program has been particularly beneficial this year with tax-refund turbulence being in play stemming from the longest federal government shutdown in history.
“Historically, large tax refunds have stimulated used-vehicle sales, as this provided the usually not available lump sum down payment cash required for a subprime customer, so much so, that whole business were created in getting that cash early to stimulate a sale,” Possumato told BHPH Report. “Lower refunds, less sales, until you factor our ‘new way’ for a cash/credit strapped consumer to buy a vehicle — by using our car-sharing program that creates extra income from on-demand driving, spreads out the down payment requirement in small increments over a series of weeks, and repairs credit all at the same time, while allowing the potential buyer to drive the vehicle they wish to own on a rental basis, to create the means by which to purchase it.
“Our program offers a multifaceted solution for dealers,” he continued. “It creates a new, money making shared mobility department that satisfies and leverages the immediate need of a new Lyft or Uber ride share driver to begin earning money, if they lack a vehicle, but, more and more, with our ‘path to ownership’ including free credit repair at the platform level, our ‘Lyft Your Down Payment’ incentives, etc., it is becoming a new way for subprime buyers, and those with little down payment money to buy a vehicle.”
Lilja shared some anecdotal stories about NIADA members who have leveraged these kinds of program, noting that some operators are seeing an extra 10 to 15 turns a month. Lilja also mentioned that it’s helping dealerships retail vehicles that have been in inventory for as long as 50 days.
Furthermore, for dealerships that also have a service drive, Lilja noted bays are busier because these customers are returning for maintenance.
And perhaps what might be most valuable, Lilja pointed out, is that independent and BHPH stores using a program like the one that’s being promoted via NIADA are enjoying the positive benefits of satisfied customers.
“They’re seeing a lot of new clientele coming through the door,” Lilja said. “That’s really excited some of our dealers. It’s made them look like the hero. It put them in a good light with these customers. You can really get a customer for life.
“They’re working two or three different jobs, and our dealers serve those client bases in some cases, especially our buy-here, pay-here operators. They’re comfortable working with a credit-challenged clientele and building some flexibility into the terms,” he continued.
Lilja summed up independent and BHPH dealers getting deeper into the Mobility-as-a-Service space by saying, “It’s a whole new horizon and opportunity.”
DriveItAway lands partnership to get free credit repair for Lyft and Uber drivers
Lyft and Uber drivers not only might have a path to generate funds for a down payment when acquiring a vehicle at certain dealerships, but they also could take advantage of a solution to help their credit situation.
DriveItAway, a company concentrating on dealer-focused shared mobility, announced in January that it is partnering with Get Credit Healthy to pilot what the operations say is the first “no strings” free national credit repair/rehabilitation service for Lyft and Uber drivers.
The companies explained this opportunity to rebuild personal credit is free to all drivers in a dealer-supplied vehicle on the DriveItAway Car Sharing platform, with no obligation to use any particular vehicle, dealership provider or any vehicle purchase commitment.
After a week in good standing, all drivers on the DriveItAway dealer Car Sharing platform can receive a free invitation to utilize Get Credit Healthy’s credit rehabilitation service, which has been seamlessly integrated into the DriveItAway driver app. The service remains free as long as the driver remains a DriveItAway customer.
On the dealer side, DriveItaway has integrated Get Credit Healthy’s leading fintech platform, to provide its dealer partners with data intelligence and sales lead recovery that turns credit “fall out” into funded vehicle loans and sales.
Possumato insisted this life-improvement service is a true differentiator and fits right in line with DriveItAway’s mission to put all of its clients on a “path to ownership.” Possumato explained all ride share drivers will be able to access it right from the platform, free of charge, and it will help all dealers facilitate a vehicle sale to all those drivers who are looking to buy.
“This is an industry first, in that this type of service has not yet been offered in this ‘no strings’ way. Partnering with a company like Get Credit Healthy in order to offer the best comprehensive credit remediation program for our longer-term drivers is a natural step for us,” Possumato said.
“This fits perfectly with exclusively car dealer clients who provide temporary vehicles for Lyft and Uber drivers,” he continued. “It is fully compliant, as there is no obligation for a renter-recipient to buy a vehicle from any specific car dealer, nor is there any obligation to buy a vehicle at all.
“Our goal is to make it a win for all and, with the ‘on-demand’ employment ride sharing provides, improve lives by making it easy for everyone to increase income and improve credit,” Possumato went on to say.
Get Credit Healthy CEO Elizabeth Karwowski elaborated about why her company chose to align with DriveItAway.
“Get Credit Healthy’s traditional partners have been financial institutions, mortgage companies and municipalities,” Karwowski said. “The common mission of our two companies is to provide our clients with the means to improve their financial lives and provide them with the necessary tools and education to help them sustain those improvements.
“At Get Credit Healthy, we are passionate about providing consumers with the tools and resources they need to eliminate debt, build credit and make sound financial decisions,” she continued.
“That’s why we are delighted to be launching this new program with DriveItAway, and to make this life improvement option available for the first time to members of the new ‘gig economy’ in shared mobility,” Karwowski added.