Uber's Leasing Program Is Changing The Auto Loan Market

Uber enters the auto financing market with a program that provides drivers with new cars

Uber's Leasing Program Is Changing The Auto Loan Market
June 8, 2016

Uber has made a name for itself with its new take on the taxi, but the company has also recently been making waves by moving into the auto financing market. Last year, Uber created a whole-owned subsidiary called Xchange Leasing to help Uber drivers and potential drivers get access to a new car for low monthly payments. Uber drivers put down a $250 deposit, pay their monthly car insurance payments, and pay anywhere from $120 to $160 a week to lease the car. This money is deducted from the driver's Uber payments.

While this allows Uber's drivers access to new economy or mid-sized vehicles, many have noted that the leasing payments are quite expensive, with most drivers paying around $600 a month to lease the car. While these are new cars, many would be able to buy a used car for a lower payment. For those who join the Xchange program and then decide the monthly payments are too high, Uber allows them to return the car with a two weeks' notice. They lose the deposit, but they are not obligated to make any further payments.

Xchange has accounted for a high number of leasings in some areas. At one Nissan dealership in Chicago, for example, Xchange made up 41 percent of the dealership's sales in May. Thanks to Xchange, the dealership also doubled its 2015 quarter one sales in 2016.

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