Powersports dealers are “not used to truly working subprime,” said Jason Sheeley, national sales manager at Ride Today Acceptance, and that’s the biggest challenge as a subprime lender.
Many dealers are used to getting a callback from the bank with a set down-payment and term, in a “take-it-or-leave-it” deal format, he said. Dealers are used to a yes or no answer when it comes to subprime, rather than tweaking the deal to get the subprime consumer financed.
If the consumer is willing to sign the contract, as long as the terms are slightly extended, for example, it’s important to have the flexibility to tweak the deal to get it finalized, Sheeley said. Many dealers are not used to “meeting in the middle to get the deal done, but they are coming around,” he added.
“Subprime is a greatly underserved area of the market, and dealerships can embrace it,” Sheeley said. Performing subprime loans is not a difficult process, it requires a set routine and checklist, but it produces a loyal customer base, he added. However, many dealers view subprime as hard, but “if they enter into it with open mind, as opposed to having a negative connotation, they can find success,” he said.
Ride Today Acceptance — a subsidiary of Encompass Consulting LLC — operates in 28 states. The Beverly, Mass.-based startup began making loans for new and used on-road powersports vehicles in April 2015. The company works with 240 dealers and adds an average of 15 dealers to its network each month, Sheeley told Powersports Finance.