Consumers are looking to buy 15-year-old motorcycles, but few lenders will finance them, Neil Noble, business partner at Calculated Risk Motorcycle Group, told Powersports Finance.
Calculated Risk, which runs six Harley-Davidson dealerships in Texas, works with lenders who finance bikes at least 10 years old, like American Credit Acceptance, MB Financial, Speed Leasing, and Fuel Capital Group. Most of these lenders cut off at 2007 or 2008 model year, though, companies like American Cycle Finance and Dealer Direct will go back 15 years. However, there are consumers seek financing for motorcycles dating back to 2000, Noble said.
“What we see is when we have those bikes in stock, there’s a strong consumer demand for them, and they sell very quickly,” Noble added. “You see these bikes sell at auction, every dealer at the sale is bidding on them, and they get bid up to well above book value. But the financing piece of it often comes up that we have customers who want it and we can’t get them approved.”
Typically, consumers at the lower end of the credit spectrum are the ones who fail to get approved for financing of these older bikes. That scenario is challenging for Calculated Risk, which aims to help all its customers leave with the vehicles they wanted.
Bikes within those model years are attractive to consumers because they are still “good quality” and are available for a more affordable price than newer models, Noble said.
A consumer shopping for a 20-year-old motorcycle priced at $3,000 likely doesn’t need financing to get the vehicle. However, “as you move up a few years, the typical bike in that age range is probably $5,000 to $10,000,” Neil said. “And there are a lot of people that are interested in financing a bike that’s $7,000 or $8,000. It makes it very affordable as a recreational vehicle.”