Car Leasing, Simplified: We Explore the Honcker App with CEO Nathan Hecht
As we move increasingly into an internet- and smartphone-dominated age, customers in every industry are becoming more and more reluctant to deal with inconvenience. Consumers don’t want to have to run around from store to store—they just want to look for what they want in one place (often their smartphones).
In the car industry, adjusting to this transformation has taken somewhat longer to occur. During the recession, the millennial generation—which make up about 30% of the population, according to the AP—seemed supremely unwilling to pay for cars, only making 17% of new car purchases. However, now as the economy has improved and a whole generation begins to settle down, millennials are buying and leasing cars in droves, but with one twist—they want it to be easy, and preferably with technology integration.
That, it seems, is where car leasing app Honcker comes in. Started just last month, the app operates by combining a number of strategies that have been used to great success by other sales apps.
First of all, the name of the app, with its unorthodox spelling of “honk,” according to CEO Nathan Hecht came less from a desire to, as I delicately put it, “avoid an unfortunate and juvenile word association,” and more from the fact that other companies have snapped up a large number of automotive-themed brand names, and were offering them for use for exorbitant amounts of money. So, with the easy addition of an extra letter, the company could continue unmolested.
Next, before we get any further, here is how the app works, according to Hecht (I tried to browse the app on my own, but the app has not yet partnered with any dealerships in the Dayton/Cincinnati area).
First, you download the app and you input your information. This includes you name, address, email, and phone number, so Honcker uses a number of layers of cybersecurity measures to protect that information, boasting on its social media accounts about how it has been certified through Experian (more on that in a minute) and uses the same standard of encryption used by the NSA.
After your information is put in, the app sends what Hecht described as a “soft credit check” using Experian, which both he and the app quickly and explicitly said would not impact the customer’s credit score, since it wasn’t a formal credit inquiry.
Then the app asks what kind of car you are looking for, and you can designate a specific model or brand. After you click search, the app creates a list of the vehicles available for lease in your area that match your description, each with their monthly price on the right created using the information you provided and information provided by the dealership that is offering the car.
From there, you browse the various offerings, browsing through offered vehicles and playing with lease durations and miles/year limits to change around the payment price (“in real time,” Hecht pointed out) until at last you come to a final decision.
Most interestingly, app users who own a Samsung 7 or better smartphone and a Samsung Gear VR headset are able to take advantage of virtual reality features, such as taking a virtual tour of the car from under the hood to inside or taking the car for a virtual test drive (although Hecht admitted that personally using VR features in general made him dizzy).
Finally, you press lease, fill out the more serious information needed to perform a credit check (an actual one this time), decide whether to pick up the car or have it brought to you, and click submit.
Your car, Hecht said, should be there the next day (when you will need to pay the first month, banking fee, title fee, etc.). So, to be completely clear, this means that it is possible to lease a car without having to get out of bed (or bathroom, depending on your preference).
Honcker operates, largely, as a way to let you shop around for a new car lease without having to drive to dealerships and negotiate with salespeople.
Each vehicle in the directory represents a specific Vehicle Identification Number, so each listing has information specific to a literal car.
On this point, Hecht said, the company is very proud, making the bold declaration that “nobody is doing” what Honcker does when processing information, mentioning that some models that the company receives data on include specifications so fine that they include stats on the needlework and stitching.
Each car listing is controlled by the dealer, which decides in which areas the car can be seen, the pricing, which institutions can offer financing, and every other aspect of the pricing. In this way, the app functions not as a middleman but as an extension of the dealer.
The pulling together of this amount of information on cars from multiple dealerships is what the company believes is allowing it to disrupt the more traditional car leasing process (along with other upcoming features, which we will come back to).
One concern that I had was that there didn’t seem to be any moment in the leasing process where buyers could test drive the vehicle. As it turns out, it was there—it’s just that nobody has done it. According to Hecht, a test drive is available in person if the buyer chooses to pick the car up from the dealer, and then asks to drive before signing the paperwork. However, Hecht said that while the option is there, people tend to ignore it, instead opting for “the red carpet treatment,” where the car is delivered to them.
Not surprisingly, the app is geared toward a younger, smartphone-using generation, although of course Honcker “won’t turn down the 55-year-old lawyer,” Hecht joked. Currently, that audience is limited to areas along the west and east coasts, with dealerships in the New York, New Jersey, and Pennsylvania tri-state area on the Atlantic side and dealerships in the LA basin on the Pacific side.
“We want to get really big really fast,” Hecht said, and nowhere is that more visible than in the rate at which the company has added dealerships to its service. When it launched, Automotive News reported that Honcker had more than 75 dealerships on its platform. Today, about a month later, Hecht said that the company has more than doubled that number, which is growing all the time, and Hecht said that the most-asked question the company receives is “when are you coming to my area?”
On the coasts, Hecht said that the company hoped to soon be able to operate in the Ft. Lauderdale area in Florida in the east, and expand into northern California in the west. In addition, Hecht said that the app would soon be able to expand inward, anticipating an expansion into the Chicago area in the next few weeks, with additions in larger cities throughout the Midwest to follow.
More than expanding in the location sense, Hecht said that the company soon hoped to be able to offer used car leases, and was in talks with two major automakers to do so—if the app is successful, Hecht described a father sending a daughter to college, picking up a used car lease that costs maybe $40 per month (used cars have already undergone the majority of their depreciation, so would cost far less on a lease). Such a lease would also appeal to those on a limited income who are perhaps worried about being able to handle large payments on a brand new lease.
More vaguely, Hecht said that the company hoped to soon be able to offer in-app financing, a sentiment echoed on the company’s website.
In any case, I have to say I wouldn’t mind if Honcker were to pick up used car leasing and expand to the Dayton/Cincinnati area sometime soon—preferably before my much-abused old Pontiac gives up the ghost.
Daniel Susco is a native of the Dayton-Cincinnati area, and has written on a multitude of subjects. He can discuss Shakespeare, expound on Classical Mythology, and even make witty jokes about Pliny the Elder (More like “Pliny the Rounder,” right?). In his free time, Daniel enjoys reading, cooking, woodworking, and long walks on the beach (just kidding – sunburn is no joke). See more articles by Daniel.