Harley Loan Nets $100K In First 6 Weeks

Published July 04, 2008, 2:11 p.m. EDT

Updated August 27, 2020, 1:10 a.m. EDT

2 Min Read

BOULDER, Colo. - One credit union here has turned to a Harley-Davidson loan to extend its lending portfolio and obtain secure collateral.

Processing Content

Elevations Credit Union here has dropped its motorcycle loan rate to its existing new and used car rate, which stood at 5.49% at press time. The program has attracted $100,000 in the first six weeks, and done well enough for the CU to consider its decision to make the deal ongoing a good one.

“This is not a promotional program,” explained Craig Burkhard, chief lending officer at the $852-million Elevations CU. “I’m confident it will continue to be a good (product) for the credit union.”

Burkhard agrees that motorcycles are often viewed by owners as toys, but Harley riders tend to be “more upscale buyers” and demand for the bikes is high, Burkhard explained. “There are some markets in the country where there’s a waiting list for a new Harley. We wanted to capitalize on the popularity.”

Despite the consumer interest in Harleys, Burkhard said the CU considered the tight economy and what might happen if a member walks away from the loan.

“Members walking away from this loan is not a concern. First, our membership’s FICO scores are extremely high. But in the event we would have to take one of the bikes back, we’re confident the Harley will hold its value and we will have little trouble disposing of it. We’ll be in better shape than a car repossession for sure. The time is right for this loan. It just made sense.”

Marketing, which cost the CU about $3,000, has emphasized the rate on the loan, which has terms out to 84 months and 115% loan-to-value financing for qualifying members. Elevations CU sent direct mail to 3,100 members over 18 who own a motorcycle, used print, its website, in-branch digital signage, and statement stuffers. The most effective promotion has been free, however. Through an arrangement with a local Harley dealer, Elevations had a bike sitting in each branch lobby.

“Any way we could get the bike in the branch we did. They got members’ attention and our staff talking. They generated a lot of conversation,” said Burkhard, who added that the credit union picked up a few bike loans from CU staffers as well.

Elevations kicked off the loan to coincide with spring. Timing with gas prices hitting $4 a gallon wasn’t planned. “That was a coincidence,” Burkhard said. “I wish I could say I had the foresight to know that was going to happen.”

Rising gas prices won’t change the credit union’s position to keep loan rates for all other motorcycles percentage points higher than its Harley rate, because bikes, outside of Harleys, “are not good collateral,” Burkhard said. The CU is making loans for other motorcycles, but at a higher rate.