Chrome Capital of Naples, Fla., has cooked up an intriguing idea: They'll write you a lease for a used Harley-Davidson motorcycle.
Working with a national network of 400 Harley dealers but independent of Harley-Davidson itself, Chrome has put about 2,500 riders on used Harleys since beginning the lease program two years ago.
It's a novel concept. Harley-Davidson's Financial Services unit has been very successful financing the purchase of new motorcycles but does no leasing of new or used vehicles.
As a result, Chrome Chief Executive Peter Wasmer says, leases are being written for people who couldn't afford to buy a Harley and might not otherwise be riding a bike at all.
"These are riders who otherwise probably wouldn't own a motorcycle," Wasmer says.
That's the dealer experience too.
"The first lease we wrote, that was that guy's only option," said Brett Dickinson, general manager of El Cajon Harley-Davidson. "He couldn't have gotten approved for a loan [for a new Harley]. He couldn't have gotten approved anywhere."
Leases make sense for Harleys, Wasmer said, in a way they wouldn't for other brands, because Harleys hold their resale value better than other brands. Also, Harley owners typically want to upgrade every two or three years and often find they can't under the terms of their loans, which often run 60 or even 72 months.
"The bikes are expensive, and the way [for Harley] to make them affordable is to extend the financing term," Wasmer said. "But what happens is a guy comes in after three years, and he's upside down on his financing. He can't upgrade."
With a lease, though, he can.
In a typical lease situation, a customer picks out a used bike from a Harley dealer. Chrome buys the bike from the dealer, and then leases it to the customer. About 75% of the time, at the end of the lease, the customer either extends the lease or purchases the bike. But the rest of the time, Chrome still owns the machine.
Harley-Davidson declined to comment on the Chrome Capital lease program except to say, "Harley-Davidson Financial Services does offer a complete line of financing options and insurance, but there is not a lease program available through Harley-Davidson."
Chrome is not the only company offering leases on used motorcycle. But Chrome is the largest and appears to be the only one doing Harley exclusively. The company recently completed a $20-million equity investment with Leucadia National Corp.
Would the country's biggest motorcycle manufacturer have a reason not to like the Chrome Capital program?
"They view our company as competition to Harley-Davidson Financial Services -- because they feel they should have control over every Harley transaction -- but we're not," Wasme says. "Our whole M.O. is to put more riders on Harley-Davidsons. We're doing that."