From the Editors

How the retail-lending environment is shaping up

Nel PascaleEscalating bad debts and loan delinquencies.

Decreasing retail-lending approval percentages.

The former usually leads to the latter, which is what we encountered in 2009 and, to a lesser extent, in parts of last year.

However, those key criteria for retail lenders — and of course, hence, dealers — both appear to be in much better shape now as we head into the key retail selling season.

I’ve talked to two of the industry’s most prominent retail lenders in recent days, and the message is positive: Bad debts and loan delinquencies have decreased, and approval percentages for consumer loans have increased.
Now one doesn’t always lead strictly to another, but it only makes sense that creditors that are dogged by fewer bad debts feel more comfortable in taking a few more risks at the consumer level.

We’ll share more news on the current retail-lending environment in an upcoming edition of Powersports Business, but it’s hard not to get feel positive about the outlook of this part of the market.

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