Powersports lenders need to “stop fighting” over the same end of the credit spectrum — prime and near-prime consumers — that everybody else wants, in order to increase their dealer penetration rate, said Chris Clovis, owner and operator at Freedom EuroCycle Las Vegas.
“You’ve got 100 lenders fighting over the same buyers that only represent 20% of market,” Clovis said. “Meanwhile, 80% of market is basically ignored. Lenders enter into the space and scratch their heads about why they can’t penetrate more motorcycle dealerships.”
Most lenders are competing for dealers’ prime and near-prime business, “so if you [the lender] want to get that business, it needs to be extremely compelling for the dealer,” he said. “The convenience and financial benefit has to be phenomenal for dealer,” such as offering “massive” dealer participation rates, he added.
“A dealer has 100 different options, so what are you going to do for that dealer that the other 99 lenders won’t do?” Clovis said. “Well, it can be through money or through convenience.” If the lender is easy to work with — creating very little work or effort for the dealer partner — dealers will partner with that lender, he added.
Freedom EuroCycle’s Clovis — formerly the vice president of operations at EagleRider — will speak on the “Voice of the Dealer — Dealers on F&I Dos and Don’ts” panel at the upcoming PowerSports Finance 2016 conference.
During the Oct. 5 session, Clovis and his fellow panelists will discuss tips for lenders to attract the dealers they want, and how dealers and lenders can build a solid network in a fragmented market.