“The sun is get’n ripe and the water’s get’n warmer”
“The days are get’n longer , them shorts are get’n shorter, you won’t hear me complain”
“It’s a summer thing”
It’s the lyrics from country’s new comer, Troy Olsen who sings a song which highlights friends, beverages and flotation devices on the water.
And speaking of flotation…it’s well known that most Harley buyers use financing from Harley-David Financial Services (HDFS) when they purchase a new ride. Not so long ago, H-D applied logic to its loan portfolio that was eerily similar to the housing bust. The company used its in-house finance unit to chase after subprime borrowers, making it easy for them to buy $20,000 chrome-sters with no money down. The risky lending—which later forced Harley to take million dollar write-downs — along with rising default rates created major problems. Customers with low credit scores weren’t the only issue for HDFS. Turns out those “creditworthy customers” walked from those no-money-down financing offers and along came the delinquencies as repossessions reached new levels.
In steps Manheim — a worldwide leader in the sale of used vehicles. Being reported as a first, Manheim Seattle helped execute a massive auction sale of Harley-Davidson motorcycles which were ‘rounded up’ from the various repossession parts of the U.S. The auction occurred last week and we had a man on the inside watching some of the action.
Essentially two auctions took place over a two-day period. The first day was exclusive to H-D dealers and the second was open to any type vehicle dealer. Of the 60+ motorcycles on day #1 about 40 sold with the remainder falling short of the minimum required bid. Tells you a little about where the dealers are in terms of inventory and price right now. The GM from Downtown H-D picked up a great buy on a Springer Screamin Eagle. The 20 or so unsold were added to the second day of bikes scheduled for auction to all vehicle dealers. The second day motorcycle inventory list were older bikes vs. the first day. However, most but not all sold. Several stalled at the minimum required and the auctioneer prompted the lady from HDFS as to any movement on the minimum bid as she looked to be pulling her hair out with the fast action pace of the event.
The motorcycle repossession/auction business is somewhat of a hidden market business which the general public knows little about. Given that the housing market remains stressed with foreclosures and short-sales being high we can expect motorcycle delinquencies to remain high and as a result firms like Manheim will continue to flourish.
Photos courtesy of John (aka.“Burn-Out”) and Manheim.