MotoLease Predicts Subprime is on the Rise

MotoLease LLCcanstockphoto8352044 (1), a Los Angeles-based powersports leasing provider, is projecting higher lease penetration in 2016, thanks to the steady incline of the industry, post-recession, according to MotoLease Chief Executive Maurice Salter.

Currently, the company offers different leasing programs across the credit spectrum, from prime to thin-file borrowers, he told Powersports Finance.

“There is a huge market out there who want to acquire a motorcycle but they have limited ways in which to do so,” Salter said. “We don’t use credit scores, per say, as the fundamental way to lease. We lease to a significant number of thin-file people, and we do a lot of research on our portfolio.”

About 70% of the company’s lessees fall into the subprime category, and 3-4% are considered thin file, he said. The lease payment term can range from 18 to 60 months, depending on the borrower’s credit qualifications and lease amount.

“We lease to people with below 500 credit scores, but credit scores are the aftermath of what we’ve done,” Salter said. “We look at employment, bills they’ve paid in the past, whether they pay their bills on time, and so on. Our goal is to qualify people, not to disqualify them.”

MotoLease also offers benefits to prime borrowers by waiving income requirements, Emre Ucer, MotoLease’s managing partner, told Powersports Finance.

“We have different programs for prime and subprime borrowers,” Ucer said. “For prime or near prime borrowers, we do not ask for their income, which is huge in financing. For anyone over a 620 credit score, we waive that requirement. In our market, I don’t think anyone else is doing it.”

MotoLease funded 7,000 powersport vehicle leases in 2015 — which has a face value of $100 million — and is aiming to fund 10,000 leases this year.

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