MotoLease has been piloting since April a new lending subsidiary, called MotoLoan, which offers consumers the chance to buy powersports vehicles without a down payment, Managing Partner Emre Ucer told Powersports Finance.
Through the zero-down-payment offer, consumers are preapproved for loans of a specific size. As long as the transaction falls below the preapproved amount, the consumer can avoid making a down payment for the powersports unit. For example, if a consumer is preapproved for a $15,000 loan and the transaction price falls below that limit, they “don’t have to pay a dime,” Ucer said. However, if the finance deal ends up being $17,000, the consumer would have to put down $2,000.
The zero-down-payment program makes MotoLoan “a little different than the other loan options available out there,” Ucer added. The company decided to include the feature into the program after an internal study found that most consumers declined loans at the dealership because they lacked the funds for a down payment.
“The consumers [did] not have enough cash that [was] needed at the time of signing the contract,” Ucer explained. “That’s the No. 1 reason why people do not move forward with their financing offer. So, under this program, that’s one of our main objectives, [consumers] being able to take the bike out of the dealership without [a down payment].” DMV fees, taxes, and dealer fees are included in the loan’s monthly payment.
MotoLoan is piloting the program with 100 dealerships, and so far the zero-down-payment has been “very well received,” Ucer said. As a result, the conversion rate from preapproval to funding is “very high,” Ucer added without specifying.
The MotoLoan program covers motorcycles, ATVs, and personal watercraft. MotoLoan will cover subprime to prime credit scores. The loan program is planning to launch nationwide in early June.