“I THINK it’s the sheep effect,” says Carlo Hansen, co-owner of Riverside Kawasaki in Somerville, Mass. “Everybody is scared at the same time. All the news is bad.”
Hansen is referring to the nationwide credit crunch. He says even his local credit unions are spooked. One of them is not accepting any applicant with a score below 650 whereas before it would go down to 580.
“We changed our whole ordering structure,” Hansen says. “We order mostly smaller bikes now. I’m so scared.”
And Hansen doesn’t scare easily. He’s a 40-year industry veteran who also sells Yamaha, Ducati, Triumph and a couple of minor brands. Like many dealers, he’s feeling the frustration of having to turn customers away because of tighter standards and fewer lenders.
Down payments, co-signers, invoice approvals — all have increased in number. Lenders are asking for more things to be submitted in the funding packets. “They’re getting very, very picky, and it’s going to be a major problem next year,” Hansen says.
Even scarier is that many experts are describing the credit crunch as mostly an affair among banks and businesses. Some of these same experts predict consumer credit cards will be the next big crisis. Things could get worse. (Continued)