New lenders are poised to enter the powersports space in 2018, Brian Landau, senior vice president and leader of TransUnion’s auto division, told Powersports Finance.
“[Powersports] is something that we’re going to continue to look at in 2018 and beyond,” Landau said. “There is a lot of movement here and I got a lot of that from the [PowerSports Finance 2017] conference in October. There are a lot of new lenders getting into the space trying to apply lessons from auto.”
Additionally, the newly passed tax bill could prove to be a boon for the powersports industry in 2018, he added.
The majority of Americans will receive a tax cut under the bill, even if 83% of the gains will go to the top 1% of income earners, according to the Tax Policy Center. Citizens in the lowest income tier would get $60 each on average, which is a 0.4% boost to their income, according to the report. The middle class would get $930, or a 1.6% boost on average.
“It means more discretionary spending,” Landau said. “More disposable income means more discretionary spending, which turns into more powersports vehicles being sold.”
However, these tax cuts for the middle class expire in 2027 and high-income Americans in high-taxed states such as New York and California could see a tax increase as early as 2018. Additionally, healthcare costs are expected to rise under the bill and 13 million Americans would lose coverage, further exacerbating the long-term costs to consumers.
“I’m not a tax expert, but especially in powersports it can be an impulse buy,” Landau said. “It caters to the short-term versus the long-term.”