Toni Anne Fardette believes a new app can help Atlantic Auto Group recapture business from leasing companies that made inroads with consumers who prefer to avoid the "runaround" they get at some car dealerships.
The Long Island, N.Y., dealership group is testing out Honcker -- an app that enables consumers to complete the leasing process without entering a showroom -- at eight of its 22 stores.
The app sends lease offers to consumers after a "soft credit check" that's completed based on information such as name and address that is provided upon registration, said Nathan Hecht, CEO of Honcker Inc. Clients can have their vehicles delivered to them by the dealership once the transaction is done.
If a customer has a trade-in, the dealership will take it from the customer when the new vehicle is delivered.
Some leasing companies have made a living on being the middlemen for shoppers. Consumers know they're going to pay a fee to have the companies do the leg work on a lease, but Fardette says certain buyers feel this method is more transparent than dealing with salesmen.
"That's what we're up against and that's what I feel like this app is going to help us to combat, because they won't need to go to a leasing company if we're providing that transparent information as a dealer," Fardette told Automotive News.
She's hoping the app will make the leasing process as easy as booking flights or hotel rooms online. Around 55 percent of the group's business comes from leasing.
Hecht said he's going after the leasing market because of the momentum there.
Lease penetration reached a record 31 percent of all new-vehicle transactions in the second quarter, up from 27 percent in the year-earlier period, Experian Automotive data show. Used-vehicle leasing is also on the rise. It accounted for 3.7 percent of the lease market in the second quarter, up from 3.3 percent the year before.
"We are nothing more than a marketplace," Hecht told Automotive News. Dealers "control their inventory and their pricing. Customers see it, get a real-time price and can actually complete the transaction."
Honcker went live last month in the New York, New Jersey, Pennsylvania tri-state area and in Southern California, from Los Angeles to San Diego. Hecht said a lease can be completed in three minutes on the app.
After a few months, the plan is to roll out used-car leasing and financing options as well.