Chrome Capital reported record high lease originations for February, and a dealer penetration rate two times its last record high, Peter Wasmer, president and chief executive, told Powersports Finance. The company’s last highest dealer penetration rate was in October.
The uptick in originations is primarily due to high consumer demand within a niche market of subprime and pre-owned financing, Wasmer said. “Because we own the asset and the consumer has an excellent low payment — and the habit of trading the vehicle at 30 to 36 months — we have a right-sized financial product that meets the consumer’s purchasing habits.”
Naples, Fla.-based Chrome Capital also doubled its year-over-year lease originations in 2015. The company is partnered with 750 dealers, and offers leases across the credit spectrum for pre-owned Harley-Davidson motorcycles and new Indian and Victory motorcycles.
Powersports Finance spoke with Wasmer about Chrome Capital’s leasing program and trends in the industry. Following are edited excerpts from the interview.
PF: How does Chrome Capital find success in the pre-owned financing market?
PW: The key is the value of the asset and the stability in future markets. One of the things with pre-owned Harley-Davidson motorcycles is there is an open liquid market, and there’s a good demand and predictable value. What we have found in designing our leasing program is that with proprietary algorithms we can take into account each independent model, and we’ve been able to tweak those to a very high degree of accuracy.
PF: Who gets the motorcycle when your consumer’s lease expires?
PW: Typically, the consumer retains the right of first refusal to purchase that motorcycle if they are in love with it, or they can return it to their dealer and get another lease. We give our dealer partners the second right to acquire that bike when it’s returned — if it doesn’t meet their desired floor mix at the time, we’ll simply send it to National Powersport Auctions.
PF: Why was your dealer penetration rate higher in February versus previous months?
PW: A doubling of the dealer utilization rate is due to our focused expansion into independent dealers over the past 18 months. Chrome develops technology solutions that deliver best-in-class systematized underwriting callbacks across all credit tiers, industry-leading automated contract generation, and a direct-to-dealer funding platform.Like This Article