Here’s what marine dealers should know to stay competitive and better serve today’s boat buyers.
One of the biggest challenges facing marine dealers today is the choppy waters of an uncertain market. Higher interest rates, consumer confidence and broader macroeconomic factors all influence purchasing decisions, especially for larger discretionary purchases like boats.
As Senior Vice President of Strategy & Revenue for Merrick Bank’s Recreational Lending, Lars Lundberg’s role includes monitoring market and competitive trends, evaluating opportunities for growth, and leading enhancements to the bank’s dealer lending program and processes that improve the experience for both dealers and borrowers. Additionally, Lundberg serves on the board of directors of the National Marine Lending Association.
Below he shares his thoughts on what marine dealers should know to stay competitive in these conditions.
Marine lending is a specialized segment of consumer finance. What are the most significant challenges you see marine dealers and lenders facing today?
Beyond the challenges you mentioned, marine lending also comes with the added complexity of properly valuing collateral. Unlike automobiles, boat values can vary significantly based on age, condition, equipment, and regional market factors. Making sure lenders and dealers have a realistic understanding of a boat’s value is an important part of the financing process.
At the same time, dealers and lenders are focused on creating a smooth buying experience. Consumers expect quick decisions and easy digital processes, so there’s a constant need to balance speed, convenience, accurate collateral valuation, and responsible lending in the sale
What trends are you seeing in the industry that you anticipate will influence the next couple of years, and how is technology playing a role?
I think we’ll continue to see customers expect a more digital and streamlined buying experience. People are accustomed to handling so much online today, and financing is no exception.
At the same time, technology is helping lenders make faster decisions, improve communication, and reduce paperwork. The lenders and dealers that can combine those efficiencies with great customer service will be in a strong position moving forward.
How are lenders adapting their products, underwriting strategies, and customer experience to meet today’s changing market needs?
Lending partners are investing heavily in technology to make the financing process faster and easier for both dealers and consumers. That includes everything from online applications and electronic documentation to more automated underwriting tools.
We’re also looking for ways to better serve a wide range of borrowers while maintaining sound credit standards. The goal is to make financing more efficient without losing the personal support that dealers and customers still value.
One area of focus for Merrick Bank’s Rec Lending team this year is reducing friction in the underwriting process. How can faster financing approvals improve dealer performance, and what can dealers do on their end to improve the process?
Faster financing decisions help dealers keep deals moving and often close a sale while the customer is still at the dealership. For customers with credit challenges, additional documentation such as proof of income or residence may be required.
Dealers can help reduce delays by setting expectations early and gathering those documents upfront. The faster we can make a decision, and the quicker required information is provided, the smoother the process is for everyone involved.
How can dealers increase boat sales with financing, especially during slower seasons?
Financing can be a great tool during slower periods because it helps keep customers focused on affordability and monthly payments rather than just the purchase price. In many cases, a financing conversation can help turn interest into a sale.
It’s also a good time for dealers to work closely with their lending partners to understand available programs and make sure they’re presenting financing options to every qualified customer.
What financing misconceptions prevent customers from buying a boat?
One common misconception is that financing a boat is much more difficult than financing other recreational purchases. Another is that customers assume they won’t qualify because of a past credit issue without ever exploring their options.
The reality is that there are often more financing solutions available than people realize. Having a conversation with a dealer or lender can help customers better understand what options may be available to them.
If you were advising a prospective boat buyer today, what should they look for when selecting a boat lender?
I’d encourage buyers to look beyond just the interest rate. A good marine dealer and lending partner should have experience in the industry, offer a straightforward application process, communicate clearly, and provide support throughout the transaction.
Buying a boat should be an exciting experience, and the financing process should help make it easier, not more complicated. Working with a boat lender that understands the marine market and can provide timely decisions can make a big difference for dealers, and in turn, for the borrower.
To learn more about how to become a dealership partner of Merrick Bank’s Recreational Lending team, visit www.merrickbank.com/recreation-loans/partner.