LAS VEGAS — More near-prime financing was provided to consumers than any other credit tier between third quarter 2016 and first quarter 2017, according to data from TransUnion.
However, that hasn’t stopped dealers from calling for more financing options for those consumers.
“There’s this no-man’s land, which is that 550 to 640 Fico,” Chris Clovis, owner and operator of Freedom EuroCycle, said at PowerSports Finance 2017.
“This is our customer, this is the working-class American who wants to buy a powersports vehicle, and we don’t have options for him.” This sentiment was echoed among all the dealers on the panel, despite TransUnion data showing that 26% of all originations are made in that near-prime range — 6 percentage points higher than in the auto sector.
However, Bradley Van Horn, owner of Buy Your Motorcycle, said the issue is a lack of flexible options for these consumers. “If you’re a 620 [Fico], no one wants to touch you,” he said. “If you’re a 635, there are two to three options; and if you’re a 650, there are 70 options.”
For example, interest rates tend to jump from 12% to 18% very quickly, he said, and if lenders were able to offer near-prime consumers an interest rate somewhere in between, there would be a lot more business for everyone.
Many lenders will do a deal with those terms, but only on Harley-Davidson bikes, Clovis said. “There’s no reason we can’t loan on a sportsbike the same way we loan on a Harley-Davidson,” he said. “This notion that lenders will loan better terms on a brand like Harley-Davidson is kind of laughable, because Harley-Davidson in 2017 isn’t the Harley-Davidson of 1996.”