Recent Articles

Kerry Baldwin & John Possumato Discuss the DriveItAway & LendAmi Partnership


John: Hi everyone. This is John from DriveItAway practicing my social distancing-self. Of course I hope everybody knows what DriveItAway does. We allow someone to buy a vehicle, in app, but rent it for as long as they want before they choose to buy it. It’s sort of like “try it before you buy it.” We think this is long overdue, it includes insurance it includes maintenance, no obligation but a pre-arranged purchase price and all the rental payments go towards the purchase if you choose to buy that used car vehicle of your choice.


We think this is the most transparent, easiest way to buy a vehicle and, you know, especially for those that might be credit challenged or might not be able to put their hands on alot of money. Now, we don’t require what I would say normally be the case, a down payment with the vehicle – a thousand, two thousand dollars but there is some up front cost. There is a security deposit. This is comprehensive, we include insurance, so there’s insurance costs so typically it’s five, seven hundred dollars down, which, under normal circumstances wouldn’t really deter too many people but we’re not in normal circumstances right now so what we’ve found is a lot of folks might, actually right now, be borrowing from friends and family to drive the vehicle of their dreams, to rent to own it. Which brought me to Kerry Baldwin from LendAmi and their very unique program on how to make it easy and transparent and formalize what was potentially, I would say, an awkward process into a very easy process.


So with that, Kerry, welcome.


Kerry: Thank you for having me John. Hi everyone.


John: I just wanted to kind of, outline, because you can do this better than I can, LendAmi. How does it work? You know, explain the process, if I wanted to, I picked a car on the DriveItAway app. Seven hundred bucks, maybe I have half of that and maybe I know a couple folks that might lend me the money, what do I do?


Kerry:  Yeah, well, first off if I can step back just a little bit, there’s this pretty remarkable number but an estimated billions of dollars are transacted in the US each year in person-to-person loans – these are loans between people who know each other – typically friends and family. These loans could be for anything from starting a business, maybe it is a down payment on a first time mortgage, maybe it is emergency medical bills and the like and, typically, when people loan money to each other it’s a verbal agreement and the terms aren’t clearly spelled out – when will the borrower pay me back, for example. Or, they simply forget what was agreed to.


So what happens is, in this lack of documentation it causes confusion between the two parties. Independent studies show that almost half of these person-to-person loans are paid back late, only partially or not at all. The end result is, sadly, distrust, hurt feelings and ruined relationships.


So we created LendAmi to help solve this problem.  It’s a mobile platform that allows people to document and track loans with people they know.


You can set up your own loan terms, document the agreement, send money using bank transfers and then track automatic recurring payments from the borrower to the lender. It’s all secure and transparent. Think of it sort of like a Venmo but for loans but with a built-in repayment plan.


John: Excellent, excellent, Now outline for me sort of the value that LendAmi brings. I mean I can see something inherently right away which is I might, as the borrower want to ask this, but without some sort of formal mechanism might feel maybe a little queasy but give me the value proposition here.


Kerry: Yeah, yeah. Well, going back to those billions of dollars each year in what I like to call “off-the-books” lending, friends and family are a proven resource of extra cash when you need it in a pinch. Generally speaking, we like to help out our friends and loved ones when they need us. Fortunately, though, we don’t check credit checks or applications so that’s a good part of the process.


But by using LendAmi to document the loan, fund it and then also pay it back, people become more comfortable asking for a loan from people they know, which can be really hard to do in the first place, and lenders feel more secure actually giving one.


Since everything is tracked online and LendAmi sends text reminders when payments are due, lenders don’t suffer through the awkwardness of asking for their money back. So, in the end, LendAmi makes it easy for borrowers to be responsible and lenders to feel comfortable. And then just one more stat if I could share, a recent consumer survey LendAmi just produced shows that 55% of people who do loan to friends and family would actually be more comfortable if they used a tool like LendAmi.


John: Excellent, excellent. Now, the big one, right? How does LendAmi work with this new DriveItAway process where literally anybody can get into a car for a lot less. Describe for me how this works.


Kerry: Yeah. So, well, first off, DriveItAway is such a great service for its customers. I love the idea how anyone, regardless of credit, can get into a vehicle using the rent-to-own option so they can basically try before they buy. And if they do end up choosing to buy, their rental payments actually go towards their purchase price so they don’t have to come up with this huge down payment all at once. It’s such a fantastic concept!


And so by helping people get into a car using rent-to-own and by helping dealers move more vehicles, DriveItAway helps impact lives on both sides of the equation.


At LendAmi, we share in that same philosophy of being in business to help people.


And where we come into play with DriveItAway is for those buyers who are just shy of the amount needed for that rental deposit and insurance, that $500 – $700 you spoke of, we actually make it easier for these people to request a loan from friends or family using our mobile platform.


Car dealers simply point buyers to a link at where they can set up their own custom loan terms including the amount, payment schedule and the interest rate – they get to choose everything themselves unlike with a bank who would make the decisions for them. And that interest, by the way, it actually goes to the lender as an added incentive giving them some earning potential as well as encouraging them to actually give the loan. It can be as low as 2% or up to whatever the state law allows that they’re in.


And then after setting up their loan terms, the borrower simply presses a button on their phone, sends the request to somebody that they know who can review and accept the terms.


They then have their identities securely validated and then they attach their bank accounts allowing the lender to fund the loan and the borrower to start repaying it back using those automatic transfers on the agreed upon schedule. It could be weekly, it could be bi-weekly, it could be monthly.


And then those automatic transfers are especially handy for those borrowers and lenders who are not located near each other, say in different states for example.


So, ultimately, we believe that DriveItAway and LendAmi are the perfect resources available right at the moment when a car buyer needs us. DriveItAway provides the pathway to vehicle ownership and then LendAmi makes it easy for car buyers to get the cash help they need in a pinch from their friends or family in a safe, secure and responsible manner.


And I do, you know, finally want to mention that we’re coming up on the holidays which is a popular time for car buyers and to be moving vehicles so we’re thrilled to be partnered with DriveItAway to help support the mission.


John: Absolutely! You know, it occurs to me we’re both sort of doing the same thing. We have, now, technology that can make life easier. Right?


Kerry: Right.


John: Imagine, trying to do a LendAmi without the technology to do it. It would just be alot of paperwork back and forth.


Kerry: Yeah.


John: Same thing with buying a vehicle in an app by renting it first. I mean, it’s just very difficult to do without scalable technology and we both have that. Well, I’ll close out. I’m thrilled, I think more people will get in vehicles. I think more people will get vehicles quicker and I encourage everyone if they have questions to give us a call or an email. Our information is there. We want to serve everybody. Everybody who are in the country.