MotoLease LLC launched an Express Program for financing low-dollar powersports vehicles in early June — despite the associated risk — and has surpassed its expectations within the first two weeks, said Emre Ucer, the company’s managing partner.
“It’s too early to talk numbers, but we have received more applications for the Express Program than we expected in first two weeks,” he told Powersports Finance. “We get around 75 to 100 applications per day.”
The MotoLease Express Program offers lease amounts between $1,500 and $6,000 with payment terms between 24 and 60 months, and no hidden fees.
MotoLease expected a “slower start” because dealers are not familiar with the program or how to market it to the consumer. “Normally, when we come up with a new program it takes around 60 days for dealers to get used to it and make it successful,” he said. “This time, that 60-day window went down to two weeks.”
“There is a huge need for a financing option for low-dollar amount bikes,” Ucer said. “Our dealers asked us for a specific program for a long time, but you need to be careful because there’s a reason why finance companies don’t get into low-dollar bikes, especially in the near-prime or subprime space.”
The typical “sweet spot” for most finance companies — including MotoLease’s standard program — ranges between $8,000 and $12,000, he said. “There’s a reason for it, because you don’t want the customer to default on low-dollar bikes. If you need to recover the vehicle and liquidate it, the percentage of liquidation costs, as a ratio to the availability of the bike, is so high that these low-dollar bikes are not as attractive. If you have to take that vehicle back, you don’t want to be underwater.”
However, notwithstanding the risk, MotoLease launched the program to meet growing consumer demand for low-dollar financing options. Many OEMs are releasing new models in the $5,000 range, and “we wanted to give a leasing option, especially for the customers who wouldn’t qualify for the other options or products,” Ucer added.1 - Reader Likes This Article