AmeriTrust CEO on scaling used vehicle leasing as it targets $1T auto finance market

Hello, you're watching Pro Acts, if I'm joined by Jeff Morgan, the CEO of a

Merry Trust, Jeff. Very good to meet you for those new to the story. Could you

give us a brief description of your background and why a Merry Trust is

focusing on the used vehicle leasing market? I am a 33 year plus veteran in the

automotive leasing space based in Fort Worth, Texas, going nationwide here in

the United States with a product that has been done successfully by several

others in the past but never at a national level at the scale in which we're

trying to take it. A Merry Trust is a FinTech company based out of Canada that

operates a finance company in the United States that is focused on

filling a void in the marketplace in used car auto leasing. New cars in the

United States make up about 25% of the overall market share when it comes to

financed vehicles. In the used car space leasing only makes up 1%. So we fill

out there's a big void. Even though that leasing is difficult in the used car

space, we've seen it successfully done by several companies and we believe

that if properly depreciated the assets will perform very well. Jeff, tell us

more about the opportunity for a Merry Trust in the automotive finance industry.

Well, if you think about it, Carvana doesn't have a used car lease. Car Max

doesn't have a used car lease. Costco, I think the last report I saw they were

doing about 600,000 vehicles a year and they don't have a used car lease. The

opportunity is massive. If you can take a market share of 1% and move it to

three or four or all the way up to 25 like the new car side of the of the

industry, you're a multi-billion dollar company. What would you say is a Merry

Trust's competitive advantage in the used vehicle leasing market? Jeff, are

people in our technology? We've developed some technology that is unseen in the

market to the best of our knowledge. We work with dealer partners nationwide

where they can submit a retail application and our technology takes that retail

application and converts it to a lease on their behalf. Then it pre-fills all the

documents, the contracts, on behalf of the dealership in the customer's name

with all the data they provided in the application. We believe that we're the

first lender in the industry to have that capability where a dealership with

very little lease knowledge can still lease a vehicle confidently and get all

the paperwork in the contract done correctly. How does the current high cost

of living for US consumers impact the growth of the used vehicle leasing

markets? Well, I tell all of my investors, I don't care if your blue or red, if

you want to blame Biden economics or Trump tariffs, whichever way you lean, the

cost of living in the United States is gone up dramatically since COVID. People

are having a hard time affording eggs is all over the news on occasion. And so,

out of leasing, the way we've designed this program, we save a customer

typically anywhere from $25 to $125 a month on a 12-month shorter term when

you compare it to a retail loan. So, out of leasing is a much better alternative

than going out to 72 and 84-month options and keeping cars well past where

they should be depreciated down to. Looking ahead to the rest of

2020-26, Jeff, what's the sum of the key milestones your investors should be

watching out for them? Massive growth. We're very picky in the vehicles that

will do. We typically stay inside of a lane of five years old or newer, and our

cars can't have more than 120,000 miles on them by the end of lease term. But

that is a massive amount of vehicles in the used car space. What that does for us

is it means that the vehicles have warranty left from the manufacturer

typically at inception so that the vehicles we know are being maintained

during the lease process. And they have value by the come back to us where we can

guarantee that we've depreciated properly to that residual value set by our

third party that Wall Street accepts. And so, our milestones in what we're

trying to do is we're trying to grow the right way at a small level, but because

we're sitting in a trillion dollar market space, we don't have to be very good

and we can still be a multi-billion dollar company. Jeff, thank you very much for

the introduction today. I hope you'll keep us updates with your progress. Yes,

sir, I appreciate your time as well. Jeff Morgan, CEO of a Merry Trust.