While OEM happenings are typically top of mind for lenders, Powersports Finance readers were also interested in lender operations in January. In a month that saw Harley-Davison and Polaris post earnings and new products, PSF readers were checking out new lender programs, snowmobile sales and ABS reports.
Here are the top five most read stories on PSF last month.
After signing up with Fuel Capital Group in October 2019, Freedom Powersports implemented the lessor into all 13 of its stores due to the lender’s fast funding, Chase Vance, regional director of operations at Freedom Powersports, told PSF. On average, Freedom’s larger stores finance 20 contracts per month through Fuel. Smaller-sized stores have three to five contracts financed. Freedom Powersports has locations in Texas, Alabama and Georgia.
Harley-Davidson Financial Services issued a $580.2 million securitization last month, its second ABS issuance after a three-year hiatus, according to a presale report from Moody’s Investors Service. The deal closed Jan. 29. The issuance consisted of prime motorcycle loans with a weighted average APR of 7.14%, the third-lowest rate in all of Harley’s securitizations. The deal’s weighted average Fico was 758, on par with the credit scores in Harley’s 2019 and 2016 transactions, and higher than the 711 average Fico in the captive’s 2015 issuance. The weighted average loan term was 71 months and was “on the longer side than that of most deals from other issuers,” the report said.
Roadrunner Power, an incentive program for dealers started by Roadrunner Financial in December 2019, is offered to dealers who carry certain manufacturers or have done a certain amount of volume with Roadrunner, though the volume requirements for the program were not disclosed. Since the incentive program is still in the pilot stage, Roadrunner will update its offerings based on market feedback, Director of Marketing Casey Casterline told PSF. “One thing we’re really focused on this year is deepening relationships with dealers who do a lot of volume with us,” Casterline said, adding that Roadrunner Power “is giving extra perks to those dealers to get better rates, they can sometimes get volume incentives and some other additional benefits.”
Snowmobile sales are likely to continue their growth into 2020, and companies like BRP and Yamaha Financial Services remain upbeat on the segment. “We had a very, very long winter, and it was good for the snow season, so sales were good on the snowmobile side,” BRP Chief Financial Officer Sebastien Martel told PSF. Meanwhile, Yamaha saw current model year snowmobile sales decline last year, but that was “by design,” Bryan Hudgin, national marketing manager for snowmobile at Yamaha Financial Services, told PSF. “2018 and subsequent years saw us with a lot of non-current inventory in the market. Rather than throw expensive rebates to try and correct our inventory and devalue our customers’ snowmobiles in the market, we limited the production of current models.”
In this episode of “Plug In with Powersports Finance,” PSF spoke with Sebastien Martel, BRP’s chief financial officer, regarding the sales growth the OEM experienced in 2019, its five-year plan to improve Can-Am revenue, the chances of an economic slowdown and how tariffs will impact BRP in the next fiscal year. After a year that saw sales growth and a successful launch of its new three-wheeled Ryker, BRP is looking toward 2020 and beyond.