CVO Social > In The News
Harley selling loans
VaEagle:
Financial planners used to say if you have to finance any car/truck/motorcycle/boat etc. for more than 3 years it's a sign that you really can't afford the item!
My father taught me decades ago to save the cash and buy it outright, then pretend you are making payments and put the money away earning interest until you can pay cash for next vehicle. The only time he didn't follow that advice was when Oldsmobile offered 0% loan for three years when he could leave his own money in an account earning 16% interest decades ago.(That only happened once though.)
In my opinion H-D should not get into the loan business but look at things as a sign they need to make a less expensive line of bikes to make it affordable to younger riders.
scottt:
--- Quote from: VaEagle on June 26, 2019, 02:05:50 PM ---Financial planners used to say if you have to finance any car/truck/motorcycle/boat etc. for more than 3 years it's a sign that you really can't afford the item!
My father taught me decades ago to save the cash and buy it outright, then pretend you are making payments and put the money away earning interest until you can pay cash for next vehicle. The only time he didn't follow that advice was when Oldsmobile offered 0% loan for three years when he could leave his own money in an account earning 16% interest decades ago.(That only happened once though.)
In my opinion H-D should not get into the loan business but look at things as a sign they need to make a less expensive line of bikes to make it affordable to younger riders.
--- End quote ---
Harley Davidson financial will finance anything with a HD vin number. This practice helps Harley keep resale values up as they are the only motorcycle manufacturer with this practice. They even advertise that they will finance a HD transaction between private parties.
Knowing that so many purchases are financed, can you imagine if Harley changed there practice?
When i purchased my first Harley in 1989 i was told that they only had one financial source and it charged high rates, a bad deal. The owner told me i needed to come prepared to pay cash. A Harley dealer was a old time motorcycle dealer then, now they are no different than car dealers. Actually, many are owned by car dealerships. They use the same process to sell bikes, payments.
When a buyer buys a new $35,000 motorcycle without a down payment or very little, figure out they owe $10,000 more than there bike is worth, they quickly sour on the bike. If they suffer a job loss, divorce, health issue, the bike ends up being a repo. Then again, it's the American way!
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mark:
The article seems to point out a couple of things:
HD is selling its debt to raise cash.
HD may have made more risky loans, for extended terms (i.e., 6-7 yrs), in order to move inventory.
Isn't this partially how the housing market collapsed in '08?
scottt:
Received a email today from my HD dealer. Offering touring models from $275 per month and softails from $250 per month. The payment numbers were the big print.
Thought it was timely. In the past Harley sold it's self through product and lifestyle. Now it's payments.
Tells me they are stretching to make sales.
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skratch:
this is nothing new. hdfs has been doing this for years. when i bought my first harley back in 2002, you could finance for 84 months then. as far as selling debt, hd is not the only one doing this. hdfs is eagle mark savings bank. there are federal regulations that say how much reserve a bank has to have on hand. loan out more than that and there are stiff federal penalties. sell that debt to someone else, and they can now loan that money to someone else.
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