Interest in powersports financing has been been upped with dealers, thanks to growth in the supbrime niche, said Todd May, United Finance Co.’s vice president of dealer development and remarketing.
Powersports dealers are becoming “more driven to finance,” May said, whereas in the past it was more difficult for United Finance to find powersports dealers to work with, especially in the subprime market. Unlike auto dealers — that have in-house F&I managers — many powersports dealers did not have a financing specialist in previous years, but have seen been staffing up their .
Currently, United Finance, a Portland, Ore.-based subprime lender, has 27 operating branches in three states. It works with 400 auto dealers and 30 powersports dealers.
While the lender does not have a current dealer goal, United Finance anticipates its dealer network to grow this year in response to increased interested in the subprime niche, May said.
“We definitely will consider partnering with anybody, and we don’t have any requirements on what we will finance,” he said. “If there is an opportunity out there, and it’s a valid opportunity that can work for the dealer, us, and consumer, we’ll look to get something going.”
The powersports space “has been active,” May said, and United Finance’s loan originations have seen an uptick this year in response. Credit performance is “adequate,” he added, because the powersports subprime niche is “a little tougher” than it is in auto finance.
Powersports units are “not always a primary vehicle,” he said. “When we finance someone’s car [the loan is] a daily driver, but in the powersports space it’s a toy or a recreational purchase. We need to be a bit pickier on who we consider for applications or loans in that space.”
The powersports loan is “not high on the priority list a lot of times,” he added. “An auto loan and utilities will come before your ‘toy’ in the hierarchy, so it’s important to underwrite the applications well and consider the purpose of the purchase.” However, the credit performance so far is “as we expect,” May said.