The consumer demand for powersports vehicles $5,000 and under “is very much wide open” and “growing like wildfire,” Kamron Davis, Nextep Funding LLC’s vice president of sales, told Powersports Finance. That’s why the company, which provides consumers lease-to-own options between $500 and $5,000, is projecting a 500% year-over-year growth in its lease originations in 2016, he said.
Many manufacturers are starting to distribute and sell more powersports vehicles under that $5,000 mark, according to Davis, but there are not a lot of options for financing that low — especially in the subprime space.
“That’s really how we got into this, and that’s how we are growing so fast,” he said. “It’s a little world that people always overlook. They [other lenders] want those $10,000, $15,000, and $20,000 deals, but we are happy with our $2,000 or $3,500 deals.”
The company finances all powersports vehicles, but sees the strongest demand for scooters, ATVs, off-road vehicles, dirt bikes, and pre-owned motorcycles.
There’s a “huge demand for used motorcycles out there,” Davis said. Many pre-owned motorcycles are $5,000 to $7,000, which provides consumers a great opportunity to take out a lease and pay the remaining amount themselves, he added.
Nextep — a full-spectrum lender, with subprime consumers comprising most of its portfolio — offers lease terms from 12 to 24 months in all 50 states, and works with more than 500 dealers.