National Marine Bankers Association survey results for the first quarter show that although new lenders are offering boat loans, loan amounts are at an 18-month low and credit requirements are more stringent than in 2012.
Service companies reported that 64 percent of loan origination was signed with new banks or finance companies in the last six months, but that didn’t necessarily translate into more loans being granted, according to the NMBA study.
Although 81 percent of all lender respondents (both service companies and banks/finance companies) indicate that dollar volume was the same or up from the same period in 2012, this is the lowest level of year-over-year volume increase in the past six quarters. Similarly, 88 percent of lender respondents expect next-quarter dollar volume to be greater than or equal to the same period last year, but this is also an 18-month low.
Consumers seem to be unresponsive to the increased wealth they should be feeling with stock market indexes reaching new highs and housing values on the rise. Automobile sales continue to gain strength, and attractive financing and leasing offers are available, so buyers could be replacing their aging vehicle before making a discretionary purchase.
On a positive note, 31 percent of participating lenders reported that new-boat financing accounted for more than 50 percent of their loan transactions in the first quarter, the highest level since the NMBA quarterly survey was introduced in the first quarter of 2011. Though new-boat financing increased, fewer lenders indicated that average loan amounts were on the rise: 87 percent reported the same or higher loan average, a number that has continued to slide since early 2012.
NMBA member lender respondents reported a steady tightening of credit criteria throughout 2012 that has carried over into 2013.
Twenty percent of the survey respondents indicate that credit criteria were more stringent in the first quarter than the previous period. Lenders also reported that consumer credit quality has fallen off a bit, although 94 percent of respondents indicate it to be the same or better than the previous quarter.