Motor Pay is a fintech company designed to help eliminate negative equity auto loans by lowering vehicle financing costs through a modern point-of-sale financing app and enhanced loan servicing technology.
The rapid growth of negative equity auto loans is a massive problem that needs to be urgently solved. Over the last several years, there has been a considerable rise in the percentage of consumers with negative equity in their vehicles, with 33% of new auto buyers rolling negative equity into their next auto loan, an increase from 26% just six years ago and 19% a decade ago. The average amount of negative equity in new car loans now stands at $5,038, up from $3,998 in 2013.
Motor Pay aims to lower interest payments through a better loan process. The company will offer a simple consumer-facing app that a car buyer can use to see lending options at the time of application. The target audience is subprime borrowers who currently pay interest rates as high as 29% APR.
The initial impact of Motor Pay is two-fold: 1) help millions of auto buyers avoid negative equity in their vehicles by lowering interest rates and reducing debt through a more efficient loan origination and servicing process, and 2) reduce auto dealerships role in the financing of vehicles.
Long term, the goal of Motor Pay is to utilize its data to create additional innovative financial products and further reward its best users with better financial outcomes.
What I Will Do With $5,000
The $5,000 will be used primarily for doing market surveys with lenders and auto dealerships to better understand the various pain points with the financing process and determine the best path to early sales traction. I hope to gain at least one dealership willing to be a pilot location. I will also use the money to travel to meet and interview potential co-founders. My goal is to find at least one co-founder who is technical in nature and who can begin building a minimal viable product.