LAS VEGAS — Subprime risk is not increasing, panelists at PowerSports Finance 2017 agreed.
“I think that the key, from our perspective, is to develop products which manage that risk appropriately for that expected credit,” Speed Leasing’s Founder Hasham Malik told attendees. “If we are looking at five-year leases, what do we think will happen over next five years? We evaluate risk on that basis, and we layer on top of that.”
Risk is all dependent on how the economy is doing, added Ben Donnarumma, managing director of American Cycle Finance. “It’s not rocket science. It’s data-driven. We get information and we apply it accordingly.”
American Cycle Finance — which specializes in subprime and nonprime — is “constantly mitigating that risk, analyzing it, and we do that on a day-to-day basis,” Donnarumma said.
There is no “bad risk” but only “miss-priced risk,” said MotoLease LLC’s Managing Partner Emre Ucer. Subprime risk isn’t increasing, it just requires more attention. The key is to “make sure payments are set up within their budget,” he told attendees. “Be careful about their income. Their credit is not there, that’s why they are subprime. You can’t depend on credit, you must depend on income.”