Harley-Davidson to Bypass Captive for Lease-Like Program, Sources Say

Harley MountainsHarley-Davidson Motor Co. appears poised to offer a “lease-like” program through one of the “big agencies” in the rental space to offer non-traditional leases, said a source who asked to remain unnamed.

The source was unsure if this agency will be EagleRider or another rental company.

While the specifics of the program are unclear, the program could operate similarly to a lease, where a consumer can finance the motorcycle for a specified amount of time and, at the end of the term, there would be a guaranteed buyback by the manufacturer.

Several manufacturers have been exploring other avenues similar to leasing, such as loans with balloon payments. BMW Motorrad, for example, offers its BMW 3asy Ride Financing program, where borrowers make low monthly payments for a specified time period, and at the end of that term — when a balloon payment is due — the consumer can complete the motorcycle purchase, refinance the remaining balance, or trade in the vehicle for a new BMW motorcycle.

“A number of OEMs have expressed interest in trying something like [balloon payments], and Harley-Davidson Financial Services has explored that option, too,” the source said. “They want to get the price-point down on the new touring bikes.”

Leasing is a product that Harley-Davidson and its captive have been “reluctant” to offer, a franchise dealer told Powersports Finance. “I think that there is a great deal of opportunity on the leasing side, but in ways that are a little more creative than just a [traditional] lease. We are playing around with a couple creative ideas for that,” the dealer said, although he declined to specify if the program will be offered through HDFS.

Harley-Davidson and EagleRider did not respond for comment.

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