MotoLease LLC launched a new leasing program catered to franchise dealers on Monday to boost new-vehicle originations and help franchise dealers increase margins, said Emre Ucer, the company’s managing partner.
Only 5% to 10% of MotoLease’s originations are for new vehicles, “but we didn’t have a separate program for the new vehicles,” Ucer told Powersports Finance. “We were using the same program for both the new and used vehicles. Now we have our ‘standard program’ for the used vehicles and the ‘franchise program’ for the new vehicles.”
The new program, which will be offered to consumers through MotoLease’s authorized franchise dealer network, will include zero-to-low dealer fees — even for deep-subprime consumers — that are comparable to credit card transaction fees, Ucer said. All new motorcycles, including cruisers and sportbikes, are eligible for the program.
“We created this program because the dynamics of new-vehicle sales can be different than the used vehicles,” Ucer said. “Considering that most dealers use floorpan financing that can eat up a couple percent of that margin, the new-vehicle net margin can be 5% to 10% lower than the used vehicles,” he added. After the cost of floorplan financing and staff commissions, there is not much room left for the dealerships to absorb the dealer participation costs required by most subprime lenders.
Currently, 300 MotoLease authorized franchise dealers are enrolled and using the new program. “We like to increase our new-vehicle originations, and we believe that the new program is better aligned to make more leases,” he said. Additionally, MotoLease has a “couple new OEM manufacturer relations” expected to be finalized in the coming months, “and this program will be a nice starting point for those OEM programs,” he added.
MotoLease’s President and CEO Maurice Salter will participate on a panel, Session Eight: Identifying New Products and Opportunities, at the upcoming PowerSports Finance 2016, Oct. 5 at Bellagio Las Vegas. For more information, visit www.go.powersportsfinance.com, or click here to register.Like This Article