Polaris Adjusts Incentives to Offset Rising Rates, CEO Says

On the heels of four interest rate hikes last year, Polaris Industries is gearing finance incentives toward payment-conscious consumers, Chief Executive Scott Wine said on the company’s fourth-quarter earnings call.

“There’s a segment of our customers that are very monthly-payment driven, and we use promotions to manage that,” Wine said. “There are certain customers that want more accessories or just want the dollar rebate on it. So, we’ve got a very sophisticated process for dealing with that. It plays to our advantage as interest rates rise where we have this more sophisticated tool that we can deploy to give people the optionalities they want with promos.”

Income from financial services grew 25% to $23 million in the fourth quarter of 2018, spurred by promotional rates and a record-high penetration level of 35%. That penetration rate will likely drop this year, Polaris Chief Financial Officer Mike Speetzen said on the earnings call.

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“Where we see rate sensitivity, we’ve got the ability — because of the strength of the retail partnerships that we have with three great firms — [to] put promo dollars to it,” Speetzen said. “Because we share in the returns they make on those customers, we end up making a substantial portion — if not all of that — back.”

Polaris does retail financing with Synchrony Financial, Sheffield Financial, and Performance Finance, a unit of Evergreen Bank.

The OEM currently has a number of active promotions, such as 3.99% APR and $2,000 rebates for 2018 snowmobiles; 3.99% APR for 36 months on certain off-road vehicles; and a variety of incentives for Indian Motorcycles such as 0% APR for 60 months on 2018 Scout models. All offers are valid through Feb. 28.

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