Powersports refinancing demand has remained low, due in part to the small loan size, but also because there is a low level of consumer awareness, according to Roger Douville, underwriting director for refinance loan broker rateGenius.
“Our [powersports] lender partners, with a few exceptions, have stayed away from that book of business because the average refinance request is very low,” Douville told Powersports Finance, but there are some that lend based on collateral.
“For example, some lenders will look only to Harley-Davidson motorcycles, versus Suzuki or other brands, because of their belief that a Harley holds value better, or depreciates less quickly than other makes or models,” he said. Some lenders are content refinancing motorcycles, but many are concerned about the performance of their portfolio because consumers can easily hide the motorcycle, he added.
The number of powersports refinance requests are “few and far between,” Douville said, also because “the general population doesn’t realize they can refinance their recreational or powersports units.” Consumers “are more focused on auto loans, mostly due to the size of the loan. If it is a larger loan with a high interest rate, they certainly can save money [by refinancing,]” he added.
San Diego, Calif.-based LightStream, one of few powersports lenders that offers refinancing options, also reported low consumer demand. “I would think it’s a pretty small percentage of consumers who refinance just because there isn’t a high level of awareness,” Todd Nelson, LightStream’s business development officer, previously told Powersports Finance. “In order to be as successful as we are, the key is having lower rates. You wouldn’t want to refinance your motorcycle loan at a higher interest rate.”
Austin, Texas-based rateGenius acts as a matchmaker between lenders and consumers for the refinancing of auto and powersports loans. The company works with 150 lenders nationwide across auto and powersports industries.