Subprime Lender Builds Rent-to-Own Model for Rideshare Drivers
Subprime lender ACC Consumer Finance plans to launch a rent-to-own program in 60 to 90 days as it looks toward the carshare industry for new product opportunities.
“The most seamless way this works is with dealers and with [carshare] companies,” said President and Chief Financial Officer Joseph Bova. “The dealership sets up a rental program, and the rentals go through that [carshare] firm.”
After several months of consistent weekly payments, the ride-hail driver would be offered financing from ACC that would end in ownership of the vehicle. “Folks are paying an average of $1,400 to $1,500 a month for a vehicle that, at a high finance rate, would cost them no more than $400 or $500 a month” on a path to ownership platform, said John Possumato, chief executive of DriveItAway, a company that connects ride-hail drivers with dealerships’ idle inventories.
Doylestown, Pa.-based ACC signed its first dealer partner, Reedman-Toll Auto Group, and is in talks with a few carshare companies, Bova said without specifying. Langhorne, Pa.-based Reedman-Toll is also partnered with HyreCar.
Read more: HyreCar Pursues Partnerships With Fleet Owners
ACC Consumer will finance ride-hail drivers with thin or no credit profiles. Instead of using traditional risk-scoring methods, like credit scores, ACC Consumer will use rental payment history as its key underwriting criteria.
“Our view is if somebody’s made several months of weekly payments on time, they have demonstrated a commitment to their enterprise, and they’ve shown they’re able to pay for the vehicle,” Bova said.
Regions shortlisted for the rent-to-own program are southern Florida; Dallas-Fort Worth; Houston; Charlotte, N.C.; Southern California; and San Francisco.
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