The amount of motorcycles Billing Finance finances has grown by approximately ten times since it began working with motorcycle broker and dealer Superbike Factory in 2013, Billing Finance’s director Oliver Mackaness told Motor Finance.
According to Superbike Factory managing director Scott Behrens, he first approached Billing in October 2013. He said: "One of the key things that led us to Billing was that the bike market was very underserved in the subprime sector, so anything that’s not high street prime business is completely underserved. This is what led us to Billing, the fact they were willing to have a look at it and cater to that market place."
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Before this approach, Mackaness said that Billing only did a very small amount of motor cycle finance. He said: "But then we had a conversation with Scott, and it was very much: yes, we have an appetite to do it, so let’s see how it goes. That was October 2013, and it’s grown very nicely since then."
Talking about the state of the motorcycle market in 2013, Behrens said it was five to ten years behind the car market. He added that bikers were often unaware of the subprime options available to them.
Behrens said: "It’s quite well known that if you’ve had bad credit or you’ve had problems in the past, you can go and find a car finance company; most of the car dealers will know about subprime finance or have someone they work with. In the bike market, if you go into a dealer and talk to them about subprime finance, most of them don’t even know what that terms means, or didn’t 2-3 years ago."
He added that bike industry is generally made up of people who are passionate about bikes, with business sometimes coming second.
For all these reasons, he said, in 2013 there were few people offering motor cycle finance.
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By GlobalData"It’s improved since then, thanks to the numbers we’re doing with Billing," Behrens said, adding: "There are also a number of other lenders now in the market place. I wouldn’t say they are doing huge volumes, but they are opening their doors to the fact there is a market place for bikes."
For Billing, the move into motorcycle finance has so far worked well. Aside from the aforementioned growth, arrears levels for bikes are better than for cars by ‘a couple of percent’. Billing’s average bike lend is also lower, and with a shorter term, than for cars.
He added: "Now that we’re in motorcycles, we do like it. Because we have just one product, hire purchase, it’s good for us to diversify. So whereas before we were just relying on our cars, we’ve now got a second string to our bow with motorbikes."
In June, Motor Finance published a feature on the motorcycle market in the UK, and generally found that the market was improving, which was something both Mackaness and Behrens agreed with.
