Ford Motor Credit Tests Leasing of Vehicles to Groups
Consumers increasingly fell behind on their payments in several loan categories in the third quarter as economic growth cooled.
The Detroit automaker's lending arm is teaming up with a peer-to-peer car-sharing app a move that could foreshadow changes in how the industry underwrites auto loans.
TrueCar, Tesla Motors and Uber approach auto lending from sharply different perspectives , but each, in its own way, is dragging the slow-to-adapt industry into the future.
Ford Motor Credit is rolling out a pilot program that allows small groups of people to lease a vehicle together.
Called Ford Credit Link, the program is intended for consumers who plan to share a vehicle. The program will become available in February for self-organized groups of three to six people in Austin, Texas.
Members of a group can communicate with each other, reserve time with a vehicle and make payments using a plug-in device in each vehicle and an app. The device and app also keep tabs on individuals' accounts and vehicle maintenance.
The program was launched in Austin because of its progressive population and effective public transportation, according to David McClelland, Ford Motor Credit's executive vice president of marketing and sales. Consumers in the area do not necessarily need to own a vehicle for their transportation, he said in a news release Monday.
"People already are sharing everything - from books to homes," he said. "Ford Credit Link makes Ford vehicles more readily available to people who may not want or need their own vehicle but have mobility requirements that must be met."
The combination of car sharing and auto finance has drawn increasing attention.
Ford Motor Credit's parent firm, Ford Motor Co., last year announced that it would be testing a peer-to-peer car-sharing service with Getaround, a tech company whose mobile app enables city dwellers to rent out their cars by the hour. It planned to target only those car owners who have loans through Ford Motor Credit.
Also last year, Uber was said to be testing a car-leasing program aimed at potential drivers for the app-based taxi service. Its features included low down payments and no limits on miles, but questions have been raised about whether its monthly payments are too high and whether it was targeting borrowers without sufficient ability to pay, according to a report on the website Re/code. The program was said to be an update of its a financing program it announced in late 2013.