Loans are typically the powersports industry’s go-to financing option, but dealers are seeing greater demand for financing alternatives for lower-credit customers, according to Joe Becerra, finance director for F&T Valley Motorsports.
“Because of the customers — particularly the first-time buyers — we get a lot of younger 19-to-20 year olds that want to get into motorcycles,” Beccera said. “The leasing option is best for them because they have minimal credit.”
First-time buyers are still creditworthy, and leasing options can help them establish their credit score, he added. While the percentage of lessees at Pharr, Taxas-based F&T Valley Motorsports is small — 10% of the total — leasing is still a fairly new venture for the powersports dealership, and will likely take time to grow and meet the demand of consumers, Becerra said.
Leasing in the powersports industry is predicted to gain ground in the upcoming years, in large part because leasing typically demands less out-of-pocket money upfront, Lenny Sims, vice president of operations at NADAGuides, told Powersports Finance.
“There was a 12% increase in leasing inquiries in our data in 2015 versus 2014. January 2016 is up 10% over last year at this time. Total leasing inquiries in 2015 exceeded 60,000.”
-Lenny Sims, Vice President of Operations, NADAGuides
While not always the case, it is possible a consumer can get into a lease cheaper than with traditional financing, and then he has the opportunity to turn the vehicle in and get another bike, Sims said. “Typically, leasing can be attractive to some people because of the less upfront cost and possibly [due to] their credit situation,” he added.
However, while the demand exists from consumers and dealers, the industry lacks a suitable leasing program for potential consumers. In order for leasing to grow, more programs have to be created and made available, Chris Rice, regional operations manager Nevada import at Ridenow Powersports, told Powersports Finance. Until those programs exist, the demand for leasing in powersports will not fully catch up to the demand on the automotive side, he added.
“I think we need to see some of the car industry’s availability to banks and lending institutions bleed over into powersports. The same goes for leasing. We have very few options in most situations and most are credit driven, meaning subprime.”
-Chris Rice, Regional Operations Manager Nevada Import, RideNow Powersports