MotoLease’s new add-on products bring growth

Lease assurance, service contracts, roadside assistance among additions

MotoLease already had a program that appealed to subprime customers. Those interested in buying a bike could lease it without mileage restrictions, despite their FICO score, and they could own the bike at the end of the lease without a large balloon payment.

Though the plan is attractive and has been drawing customers in the seven states where MotoLease has been offered, the leasing plan alone wasn’t the only service MotoLease managing partner Emre Ucer wanted to offer. He wanted to add more F&I products that not only increase his subprime business but also attract prime buyers. 

“For a long time we’ve been looking for a company to partner with. Our goal was to be a one-stop shop to provide a turnkey solution to both the dealers and the consumers,” he explained.

Now MotoLease has found that partner in EFG Companies, the innovator behind the award-winning Hyundai Assurance program. Ucer contacted EFG earlier this year, seeking a partner that could help MotoLease offer more services to its dealers and customers. Now, MotoLease is offering lease assurance/vehicle return, roadside assistance and service contracts with EFG as the backend administrator.

Starting in June, each vehicle leased from MotoLease has come complimentary with six months of lease assurance and 12 months of roadside assistance, with the option to upgrade those packages and include a service contract. MotoLease will be selling these products using SelectGuard branding.

“When it comes to the lease space, MotoLease is very differentiated in providing these complimentary products as part of the lease. And what that does for the dealer, it gives the dealer an ability to have A) A greater opportunity to generate profit through upselling the program, and B) They’re doing right by their customer by providing these quality products that are of tangible value,” said Jenny Rappaport, chief marketing officer and president of marketing services at EFG Companies.

Add-on products

The lease assurance program now offered by MotoLease is unique in the powersports industry. Lease assurance allows customers to return their bike without damaging their credit in the case of financial hardship. MotoLease offers the program complimentary for six months, allowing dealers to upsell the program for the remainder of the 18-60-month lease.

“If they lose their job, become disabled, international transfer, accidental death, they can return their motorcycle without damaging their credit,” explained Glenice Wilder, vice president of EFG Motorsports.

“We were very excited about building a product like that together to provide lease assurance options for the lessees,” Ucer said, adding that a Plus program can also be purchased, which will cover three months of payments while the lessee gets his or her finances in order.

The MotoLease program was inspired by Hyundai Assurance, which EFG designed for Hyundai when the economy crashed. Hyundai at the time had contacted EFG looking for a way to differentiate itself in a bad economy just as the OEM was starting to gain a foothold in the U.S.

“We developed this program for them which basically said, ‘If you buy a Hyundai, and you lose your job, you can return that car with no impact to your credit, and you can just walk away,’ and they experienced over a 14 percent increase in sales while the rest of the industry was down over 27 percent,” Rappaport said.

Though lease assurance was especially important, and one of the reasons Ucer contacted EFG, MotoLease was also looking to add other programs. Twelve months of roadside assistance is now complimentary, with the chance for dealers to upsell it for the full terms of the lease. And MotoLease will be offering customers the option to buy service contracts, which are especially reassuring for the 90 percent of MotoLease customers who are purchasing pre-owned units.

“I felt that we should start with the products that we feel like the end user customer can really benefit from in a big way, so I’m not against any of the other [F&I] products, but we thought these were top three,” Ucer said, adding MotoLease may add other products in the future.

MotoLease’s goals in adding these products are to relieve some customer objections and to add more prime customers to its mostly subprime market.

“Many of their consumers are in more of the subprime space, and they want to offer something out there that will draw in the prime [customers] as well,” Wilder said.

By adding the new products, MotoLease also makes selling service contracts and roadside assistance easier, as the backend for those, along with the lease assurance, is within MotoLease’s administration portal. That means all forms are electronic and can be completed at once.

“They do not have to quote these add-on products as a price, but as part of our system, it becomes part of our monthly payment. It’s usually easier to sell a monthly payment than a total price,” Ucer said, adding that the convenience of using one system also gets customers in and out faster and allows less time for objections.

New partnerships

With EFG’s experience developing the Hyundai Assurance program, it was easy for MotoLease to have confidence in its newfound partner. But EFG also sees a lot of positives in working with MotoLease.

“There are many prime lenders that are out there; there are not as many subprime lenders that are out there, and MotoLease steps up, and says, ‘Hey, you know what? We can finance anyone and everyone.’ So based on their way of thinking and our way of thinking, we felt that it was a really great partnership,” Wilder said. “The quality of the customer service that they provide to the dealers as well is in line with our beliefs with how to provide great service to our dealers as well as the consumer.”

With nearly 40 years in claims experience, EFG employees say the company is well-versed in customer service, so MotoLease and its dealers should be confident leaving customers in EFG’s hands should a claim arise. Wilder said the company knows how its service can affect customers’ impressions of the dealerships that sell them EFG’s F&I services.

“If the customer experience is good, and in terms of the consumer protection products that are on that bike, if there’s a good claims administration experience when they have an issue, that’s just that loyal customer that you build, and they’re going to buy their next bike from you, and they’re going to refer their brother and sister-in-law and friends over to do business with you as well,” Wilder said.

EFG also strives to be a partner with its dealers, visiting them and helping them dive into their financials twice per month.

“We’re providing them with a review of their business, identifying processes and procedures that need to be put in place or pay plans that need to be changed to help drive their business and help drive their people. So we are a full-service [provider]. We are partners. I tell them that we are not a vendor; we are a partner,” Rappaport said.

EFG has historically serviced the automotive industry, but the company began doing work in powersports about a year ago, after some automotive dealers who picked up powersports vehicles called EFG seeking powersports services. Though EFG is somewhat new to powersports, Rappaport said the transition wasn’t difficult.

“When we started this, I was excited because I have a Harley, and it was just a great fit for me,” she said. “I believe that when we hit the market with our team, we were educated on the motorcycle/powersports space and were able to listen to what their needs are and bring that to market for them very, very quickly.”

MotoLease’s business grows

MotoLease believes that by adding lease assurance, roadside assistance and service contracts to its offerings, it can grow not only its business but its dealers’ businesses as well. In addition to increasing its product offerings, MotoLease is also increasing its dealer network.

“We are doing really well. We limited ourselves in the beginning to seven to eight states, but this year we made the decision to get into more states, so by the end of this year we’re probably going to get into 30-35 states,” Ucer said.

MotoLease began by offering its lease product to dealerships in Florida, Texas, California, Arizona, Nevada, Georgia and South Carolina, and in early July, the company added dealers in Ohio to its roster. The plan is to add about one state into its network each week for the remainder of the year.

So far, dealers who have been working with MotoLease have appreciated the company’s 90-plus-percent approval rate, instant decisions on more than 70 percent of subprime applications and the residual value under 10 percent, which makes MotoLease more of a lease-to-buy program rather than a traditional lease.

Ucer visited dealerships in Tampa and Orlando, Fla., shortly after the EFG partnership was revealed, and dealers were happy about the additional offerings.

“I only heard good things, so it seems like dealers are really excited,” Ucer said. “They think that that will help them close more deals.”