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Fair is an embedded auto warranty platform designed for enterprise software, marketplaces, and insurance companies, helping them boost revenues by offering consumers transparent, efficient, and tailored auto warranties.
When consumers are in the market for a car, the word "warranty" often feels synonymous with "scam." Consumers hear stories from their family members and scroll through Reddit threads abound with stories of extended warranties purchased at the point of sale or afterward, only for buyers to discover that the warranties do not cover items they assumed would be protected.
Today, only 21% of consumers trust the auto warranty industry. Many feel scammed by high prices and unclear dealer motivations, whether buying a warranty at the point of sale or acquiring one afterward. It’s widely known that dealers sell cars not just for the vehicle itself but to push extended warranties and secure the service and parts business—these revenue streams account for over 80% of a dealership's net profit. Often, dealers might sell a car at a loss just to profit from the warranty. Consumers aware of this might try to buy a warranty outside the point of sale, but uncertainty remains. Stories like those above highlight a troubling trend: many auto warranty companies sell numerous policies, collect the money, go bankrupt, and then start anew under a different name.
Fair is revolutionizing the extended auto warranty space with its embedded warranty solutions designed to be transparent, efficient, and tailored to individual consumer needs. The flagship product, Fair Protect, covers essential systems in vehicles from 2014 and newer, including the engine, transmission, suspension, brakes, steering, electrical systems, and trip interruption. Fair is aiming to capitalize on what the team believes is a $9.6B white space that currently does not exist in the auto warranty market. This opportunity lies beyond the traditional point of sale with dealers and the usual D2C channels. Fair intends to offer its products not through a mix of dealerships but primarily through merchant partners such as auto insurance agents and credit unions offering small auto loans.
Fair offers a web-based application that enables customers to easily sign up and purchase vehicle service contracts, creating a user experience like the early days of online car buying. Unlike traditional warranties that span 3 to 7 years, Fair’s service contracts operate on an annual renewal basis, providing flexibility to adjust pricing to maintain competitive, consumer-focused offerings. In addition, Fair pairs a percentage of unused premiums back to the customer as a credit.
The Fair team is looking to revolutionize the industry by bringing a new kind of warranty that provides a win-win for their go-to-market partners (more efficient underwriting) and consumers (credits for unused premiums). The market opportunity is vast, and the Fair team is stacked with the right players. CEO Will Betteridge has brought tech-driven solutions to antiquated markets throughout his entire career: manual cars → Cruise, grocery stores → Instacart, and video → TikTok. CTO Saritha Ivaturi has built countless products at both startups and established corporations; she knows what it takes to build a delightful product that is technically sound. When our team at Redbud reflects on commonalities between our existing portfolio companies, all of them are bringing tech to an antiquated market, and Fair is no exception.
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