Merger Donlen-Wheels: How Wheels invented corporate vehicle leasing in the U.S.
Tracing its history back to 1939, Wheels Inc is one of the oldest leasing companies in the world. This company has seen it all – from the very beginning of leasing to the latest developments in the industry. Interestingly, like its now-partner Donlen, Wheels Inc was founded in Chicago by a duo of dynamic entrepreneurs.
In 1936, Zollie Frank left his home in Ohio to go make his fortune in California. He stopped off in Chicago to buy a car – and ended up buying an entire car dealership as well. That was the starting point for the vehicle leasing company that Frank would found a few years later with Armund Schoen, his future brother-in-law.
The company was called Four Wheels, and it would grow into one of the leading car and truck leasing companies in North America. But at the end of the 1930s, that still seemed like a very distant prospect. Leasing was virtually non-existent. Most companies simply owned their vehicle fleet. They acquired their vehicles from large car dealerships. Smaller ones like Frank’s were frozen out of the business.
But those large companies also had a problem. Often they helped their salesmen buy a car, by providing them with the required one-third down payment. However, as soon as those employees had their own car – still rare in those days – they were likely to be pirated by other companies. As a result, the original company lost its down payment.
From 5 to 75
So Frank and Schoen developed a solution: a ‘long-term’ (12-month) lease, at $45 per month, including insurance, maintenance and tires, and with the agreement to replace the vehicles after one year, if the contract were to be extended. In the first year, Frank and Schoen leased five cars to pharmaceutical company Petrolager. The formula proved so successful that next year, they provided 75 vehicles, covering the entire sales fleet.
The next decades would be characterised by stellar growth, and steadfast loyalty to customers – corporate and private, leasers and buyers. In 1953, Four Wheels acquired the smallest Chevrolet dealership in Chicago. By the 1970s, it had become the world’s largest vehicle dealership by volume.
In 1955, Frank and Schoen were instrumental in the founding of the American Automotive Leasing Association (AALA), a sign that the industry was maturing.
When Four Wheels started out, its main product was closed-end leasing. However, in the 1950s, the North American vehicle leasing industry evolved towards the open-end leasing model that still dominates its market today. And so did Four Wheels, which founded Wheels Inc as its subsidiary for open-end leases, which soon comprised almost all of its business.
Over the decades, Wheels Inc did more than keep up with the times. By wholeheartedly embracing innovation – adopting computers as early as the 1960s – the company managed to grow its business to include a portfolio of over 340,000 vehicles on the road in North America, with annual sales close to $1.4 billion. A global alliance with ALD Automotive, launched in 2009, provides Wheels Inc with a similar window on the world as Donlen has via its own alliance with Athlon.
Link to the past
Through it all, however, Wheels Inc did manage to keep one link to the past intact – the family connection. The company’s President and CEO is Dan Frank, the son of the previous CEO Jim Frank, and the grandson of the company’s founder, Zollie Frank.
With its venerable pedigree and extensive experience in truck leasing, Wheels Inc certainly lives up to its corporate slogan “Business Moves Better With Wheels”. Its history and expertise will prove an interesting fit for the tech-savvy of fellow Chicagoans Donlen.
Picture caption: A postcard of Zollie Frank’s giant Chevrolet dealership – showroom and service centre – in Chicago in the late 1960s.
Picture credit: Wheels Inc.