Well, this is an “interesting” problem. According to the Wall Street Journal and Bloomberg, Harley-Davidson is struggling to find enough repossession agents to repossess bikes from those who don’t make their payments. And the problem is so big that the MoCo reported a $52.6M credit loss stemming from its financial services division. In addition, its motorcycle delinquency rate rose 46 percent to 3.2 percent from a typical rate of about 2 percent.

Pandemic roots

The theory is while the pandemic was on, spending was encouraged, and payments were enabled by government stimulus checks. But by the time the pandemic was over and the checks stopped coming, some Harley-Davidson buyers no longer had the means to make their payments, and delinquencies began to rise.

But unfortunately for Harley, during the pandemic, many motorcycle repossession companies left the industry and never returned. The lack of recovery agents has Harley scrambling to find willing and able professionals to repossess their bikes from delinquent buyers.

Interestingly, it’s not the same problem in the auto industry. In that industry, repossessions continue unabated. But for motorcycles, it’s different. Some repossession companies told the Wall Street Journal that Harley doesn’t pay enough for a more complex and dangerous job than cars. Adding to the problem is the fact that lenders don’t pay at all if recovery of the machine is not made.

Moto repo is more complex

Vaughn Clemmons, President of the Automobile Recovery Bureau in Houston, TX, and head of the American Recovery Association thinks Harley is not paying enough to make it worth the repossession agents’ time and effort. The Wall Street Journal quotes him as saying:

 “They expect the work for free, and that’s what we’re trying to get away from.”

“Who wants to back up in a driveway at 3 a.m. and get shot at? You can make the same money doing something else.”

However, Harley says it values its relationship with the repossession industry. They counter saying they pay above and beyond, including surcharges, to recognize the complexity of repossessing a motorcycle.

During a conference call with analysts, Harley’s treasurer David Viney claimed that while delinquencies weren’t especially high, the weaker repossession industry led to more severe losses in the first quarter of 2023.