The following article is a monthly Q&A segment on Powersports Finance that offers a glimpse of what senior industry executives are thinking about outside the boardroom. Read on to find out.
While one popular trend with finance companies is to lower monthly payments with longer loan terms, a better alternative might be to match the term with the number of years a borrower will ride their vehicle, Peter Wasmer, chief executive of Fuel Capital Group, told Powersports Finance.
Wasmer has more than three decades of experience working at finance companies. He got his first taste of leasing working at his father’s equipment leasing company, Somerset Capital Group, where he served as senior vice president leading the sales and marketing team.
Wasmer was a motorcycle fan and rider as a kid but didn’t consider entering the powersports industry until his business partner came to him with the idea of leasing Harley-Davidsons.
“My partner, who is [Fuel Capital’s] Chief Financial Officer Stephen Swain, was an investment banker when we met in 2010,” Wasmer said. “He and his partner approached my dad and me with the idea of leasing Harley-Davidsons. One of the foundational elements of this business, in particular, comes from our experience in the equipment leasing business, which is determining the future value of this asset that we’re going to buy today. How much is it going to be worth in the future?”
The duo formed Chrome Capital Group LLC in 2011, specializing in leasing Harley-Davidsons. The company closed its doors in 2016 amid a halt in investment funding from Leucadia National Corp. In August of 2018, Wasmer and Swain launched Fuel Capital Group, which provides leases for Harleys and Indian Motorcycles. The Naples, Fla.-based lessor works with more than 100 dealers in 18 states.
PSF recently spoke with Wasmer about his company’s goals, helpful advice he’s received, and undervalued trends in the industry. His edited responses follow.
Powersports Finance: What are your company’s goals in 10 words or less?
Peter Wasmer: To be the preeminent funding partner to all motorcycle dealers.
PSF: What is your favorite piece of leadership advice you’ve received?
PW: When it comes to important decisions, you should triangulate the decision. It was mentioned that you should get two other people that you trust implicitly to weigh in on how they would look at the problem and what they would decide. If their response or decision is closely aligned with mine, I’m on the right path. If it’s very different, it may mean that I need to look at some things differently and come up with maybe a different decision. It’s been very helpful. Triangulating important decisions is one of the things that I’ve employed for several years.
PSF: What do you think is the most underrated trend in the powersports industry?
PW: Finance companies delivering a package or a term that matches the consumer experience term. When we look at Uber, you’re only paying for the ride from Point A to Point B — and that cost or investment match exactly with the use requirement. I see trends in many finance spaces where there’s a move to extending the term further to lower the monthly obligation. I think that’s overrated and is prone to a higher degree of problems and causes potentially a higher unsuccess rate for a consumer to pay off the loan. There’s a higher likelihood of life events that are happening along with the longer term, which would cause unhappiness or the lack of success. So I think an underrated trend is really focusing on matching the loan term with a rider’s experience. The data is well known in the industry about how long somebody will actually ride a motorcycle, so you should have a financing product that matches that.
PSF: What person has had the biggest influence on your career?
PW: Without question my father. My dad’s an immigrant from Cuba. He made certain to earn a great education [in the U.S.]. He was a business owner for as long as I can remember as a kid. Philosophically and practically speaking he was a big influence. He owned a very successful equipment leasing company named Somerset Capital Group.
PSF: What’s something all of your employees would be surprised to learn about you?
PW: I think they would be surprised to learn that when I take my morning runs, I run barefoot. I really like to feel the ground under my feet when I run. For some reason, it’s a lot easier on my body than when I wear running shoes.