Semi-Monthly Payments to Improve Subprime Performance, MotoLease CEO Says

MotoLease LLC is not receiving consumer pushback following the announcement that it will implement a twice-a-month payment structure in December, Chief Executive and co-Founder Maurice Salter said at PowerSports Finance 2017 last month.

For the top three credit tiers — the prime lessors — the customers get a choice in whether or not they decide to utilize the new payment structure, he said. However, for the bottom tiers the semi-monthly payments are a requirement.

That being said, subprime lessors have not pushed back on the new structure. “If people can get credit, that’s what they care about,” Salter said.

Additionally, semi-monthly payments can help consumers budget by having smaller payment amounts, Managing Partner Emre Ucer previously told Powersports Finance.

The powersports leasing provider has been developing the new payment structure for the last year-and-a-half, Salter said. “It’s not easy to do,” he said, adding that some of the complexities involve deciding which days to auto-debit the lessor’s account. For example, if the company auto-debits on the 12th of the month the lessor is less likely to have funds available, Salter explained.

“We have a manual payment option if the customers want to send in checks,” Ucer previously said. “If they chose to participate in recurring ACH billing, we waive the security deposit requirement and the funds are automatically deducted from their bank account via ACH payment method.”

“The Federal Reserve came out with an article [in September] that was based on mortgages but the findings were that any subprime or near-prime individual who has twice monthly payments has a 55% better chance of making their payments than without it,” Salter said. “That says it all, and we believe that strongly.”

For more coverage on PowerSports Finance 2017, click here.

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