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Author Topic: Harley selling loans  (Read 1071 times)

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muddypaws

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Re: Harley selling loans
« Reply #1 on: June 26, 2019, 11:09:52 AM »

Anything to get some cash...
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Re: Harley selling loans
« Reply #2 on: June 26, 2019, 12:56:54 PM »

6 year loan to buy a MC to me seems incredible, but it's the current HD average. Long time frame, lots of buyers probably never get upside on these loans before they trade again.  It does indicate a lot of buyers cannot afford the downpayment which could indicate they really cannot afford the bike they are taking out the loan on. 

Motley Fool has a long history of dissing HD, so I take that into account but the indicators for HD are not good from several aspects.
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Twolanerider

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Re: Harley selling loans
« Reply #3 on: June 26, 2019, 01:09:54 PM »

Have seen signage at the local shop saying 84 month loans were available.  84 months!   I thought financing a non-necessity at all was nuts.  But 7 years?  Geez.
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dayne66

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Re: Harley selling loans
« Reply #4 on: June 26, 2019, 01:37:08 PM »

The only reason I'd finance is on a low rate to keep the cash to invest and pocket the spread......last bike 'earned' me almost $10,000....although that was only Can-bucks!
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VaEagle

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Re: Harley selling loans
« Reply #5 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.
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scottt

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Re: Harley selling loans
« Reply #6 on: June 26, 2019, 03:23:17 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.
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!

Sent from my SM-J327T using Tapatalk

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Mark

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Re: Harley selling loans
« Reply #7 on: June 26, 2019, 08:50:11 PM »

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?
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scottt

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Re: Harley selling loans
« Reply #8 on: June 26, 2019, 09:08:06 PM »

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.

Sent from my SM-J327T using Tapatalk

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skratch

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Re: Harley selling loans
« Reply #9 on: June 26, 2019, 09:27:59 PM »

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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bbrown

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Re: Harley selling loans
« Reply #10 on: June 26, 2019, 11:38:47 PM »

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.


Yup. All auto manufactures and others sell these notes to other big finance companies who need to invest in secure transactions.....this was my pre retirement life..nothing to worry about...
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HighOnHD

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Re: Harley selling loans
« Reply #11 on: July 01, 2019, 05:02:15 PM »


Yup. All auto manufactures and others sell these notes to other big finance companies who need to invest in secure transactions.....this was my pre retirement life..nothing to worry about...
Awesome. Thank you! I was almost convinced that the whole world was coming to an end after reading Mark's post!
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FLSTFI Dave

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Re: Harley selling loans
« Reply #12 on: July 01, 2019, 08:43:42 PM »


Yup. All auto manufactures and others sell these notes to other big finance companies who need to invest in secure transactions.....this was my pre retirement life..nothing to worry about...
The selling of loans is nothing to worry about.  However an 84 month loan for a rapidly depreciating asset is something to worry about, a very bad idea.  Especially if it is a toy. 

Just how long are you upside down on a 84 month note with zero down?  Four years?  Five years? 

I usually take a 4 year note, but I also have close to 50% down when I take delivery. 
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Mark

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Re: Harley selling loans
« Reply #13 on: July 01, 2019, 10:00:37 PM »

How long has the MoCo been financing for seven years?  If you're buying a $15-40k bike and need seven year financing, you need impulse control, not a bike.
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skratch

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Re: Harley selling loans
« Reply #14 on: July 01, 2019, 11:12:57 PM »

when i bought my first sportster back in 2002, they were offering 84 month financing then.  and no, i didn't take it.
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smkymtnboy

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Re: Harley selling loans
« Reply #15 on: July 01, 2019, 11:30:54 PM »

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.
are you saying they all do that! seems like I have heard that somewhere before! :huepfenlol2: :huepfenlol2: :huepfenlol2:
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iski

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Re: Harley selling loans
« Reply #16 on: July 01, 2019, 11:36:22 PM »

are you saying they all do that! seems like I have heard that somewhere before! :huepfenlol2: :huepfenlol2: :huepfenlol2:

 ;D ;D
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