HEIDI BYERS IS finance director for the RideNow Powersports network of 24 dealerships with corporate headquarters in Tempe, Ariz. So she knows how difficult obtaining sportbike loans became during the credit crisis. “For a while, if it was a sportbike or an off-road unit — good luck. I hope you have a cash customer,” she said.
But Byers and other dealers report that banks are lending again. Perhaps not as haphazardly as they once did during the heyday of open credit, but approval rates are higher, interest rates are lower, terms are better.
“All the manufacturers are actually coming out with very good, creative programs,” said Ron Seidner, owner of Bert’s Mega Mall in Covina, Calif. “It has loosened up to the point that they’re starting to loan again on a pretty good, regular basis. It’s just that no one is loosening up to the point where it’s in a dangerous area.”
Dealers say the shift toward installment loans from revolving credit has led to a healthier equilibrium. And because of regulations like 2009’s “credit card Bill of Rights,” revolving programs are now similar to installment loans. “They have a fixed rate and a set term,” Byers explained. “It’s not necessarily a true set term, but the customer should be close to, if not paid off, by the end of making a series of payments.”
Suzuki and Sheffield Financial offered this spring’s most exciting program: zero percent APR for five years across multiple credit tiers. At press time, the program had been renewed until the end of May. Dealers say the program initially also included cash rebates for noncurrents and 1 percent participation.
The program worked brilliantly in cleaning out inventory and precipitating conquest sales. “If I had a steady supply of GSX-Rs, I could be selling like one a day,” said Dana Golightly, general sales manager for Top 100 dealer Chaparral Motorsports in San Bernardino, Calif. “Suzuki really did its homework this time around. They’ve had 1.9 before, which is nice, but it’s not really an eye-catcher like zero percent.”
The biggest F&I news so far this year is Capital One’s purchase, effective May 1, of HSBC Card and Retail Services, underwriter of several OEM programs. HSBC entered the industry in 2005 by purchasing Illinois-based Household International, which has been making powersports loans for about 35 years. Dealers say the purchase has not affected promotions. Honda Financial in April began to finance its used sportbikes after financing only its used cruisers and Gold Wings.
The five OEM programs underwritten by GE (all installment) finance used bikes of their own brands. Capital One also has used-bike financing. Sheffield told us that pre-owned financing “is on the radar as an opportunity. It is something Sheffield aims to explore in more detail.”
Sportbike dealers report mixed results with third-party banks and credit unions, many of which stopped doing motorcycle loans during the recession. Euro dealers certainly have an advantage. MB Financial, for example, finances used sportbikes made only by BMW, Ducati, Aprilia, Moto Guzzi, Triumph and MV Agusta.
This story recently appeared in the Dealernews June 2012 issue.