LAS VEGAS — Manufacturer rebates may create sales problems and disrupt the customer buying cycle if rebate amounts continue to increase, Donal Hummer Jr., president and chief executive at ThunderRoad Financial, said during a fireside chat at PowerSports Finance 2017.
“In the last three-and-a-half years, I think I’ve seen the rebates that are offered on powersports vehicles go from $300 to $400, now they are $3,000 to $5,000 — almost 25%, sometimes 30% of the value of product,” Hummer said. “That genie is never going back in the bottle. It is concerning from our standpoint as we see these [rebates] because of how people are going to look at this industry and performance of the portfolio of the products.”
More specifically, if a $20,000 vehicle has a $5,000 rebate, the recovery rate upon repossession is unfavorable, he said.