We all consider ourselves budget-savvy. We pay the bills and put the rest into savings and investments.
But every time we try to get ahead on our debt, other expenses interfere. Sometimes, the extra money is needed for medical bills or to replace a broken appliance, but too often, it simply slips away to things we don't need, like that bigger television or the new gizmo that promises to change our lives.
Gary Habeeb witnessed this spending trend and started a profitable biweekly mortgage payment service. He offered homeowners the benefit of paying off their mortgage sooner -- which saves on interest -- because they make one extra monthly payment every year.
In essence, consumers get ahead on debt without feeling the pinch. Habeeb knew the service could be applied to car payments, but wasn't sure how.
One night, after saying his prayers and drifting off to sleep, he leapt up with one thought in his mind: Halfpayments.com. He ran downstairs and flipped on his computer. Searching the Web and domain name registrars, he found nothing similar.
"We had done very well in the mortgage industry, but I was praying to the Lord for something to open up," he says. "Jesus answered my prayer. He's blessed us unbelievably. There's no other way to see it than as a blessing."
Even before divine intervention helped him solidify his plans, Habeeb had put in place the proper components for applying the half payments idea to nearly any industry. Here's how he did it.
Stake your claim
Habeeb, CEO of Halfpayments Inc. in Strongsville, patented his biweekly car payment service and trademarked the name Halfpayments. When he founded the system last year, it was one of the few dot-com companies that had true first-mover status, and it's continued to hold onto that position.
"We have no competition," he says. "I think (the trademark) really deters a lot of people from doing it. If you were going to do something similar, what would you call it? You really couldn't call it other than what it really is."
Habeeb's system is user-friendly. Car buyers are charged a one-time set up fee of $199.95 when they sign up for the service. There's no electronic transfer fee, which is common with biweekly mortgage payments, and Habeeb doesn't charge the car dealership for implementing his system, even though it guarantees customers will save money and likely return to that dealer when they are ready for a new vehicle.
Consumers like the system because they can pay off a typical five-year car loan five months early and save anywhere from $500 to $2,000 on interest.
"Could you do our system by making an extra payment a year? Sure you could," Habeeb says. "But who does that? Nobody. It's a service, no doubt about it."
Thanks to strong regional publicity and a team of 65 marketing representatives, word spread quickly about Halfpayments.com. Dealerships from all over the country signed up for the system. Then, investors called to offer money, and rival companies called with acquisition offers.
But Habeeb wasn't interested in a fast buck. He saw the long-term potential of his system. However, he is in negotiations with a major company in the automotive industry to form a partnership using the Halfpayments system.
Due to legal restrictions, he would not reveal the name of the company. He did say that the key to the company's future success will be not only with dealership partnerships, but with the larger national and international companies as well. That is why, when the system was unveiled last August, he launched nationwide instead of test marketing locally.
"We're trying to get into the market as quickly as possible on a large scale like many Internet companies, but at the same time, we're also building bricks-and-mortar type relationships," says Elias Hussney, president of Halfpayments. "I think that culturing and cultivating of long-lasting relationships is what's missing in a lot of business practices these days."
How to reach: Halfpayments Inc., (866) PAY-HALF or www.halfpayments.com
Morgan Lewis Jr. (email@example.com) is a reporter at SBN Magazine.