Harley-Davidson Motorcycle Trust 2024-A Annual Report - How They Did This Year

Grab a coffee—let’s talk about how the Harley-Davidson Motorcycle Trust 2024-A performed over the last year.

First, let’s clarify what this "Trust" is. It isn't the motorcycle company itself. It is a financial tool that holds a pool of motorcycle loans. When you buy a Harley on credit, your loan often goes into a trust like this. The trust then sells pieces of that loan income to investors. This allows Harley-Davidson to turn customer payments into cash today so they can keep lending to new riders. The 2024-A Trust started with about $850 million in loans to support Harley-Davidson Financial Services.

1. The Big Picture: How did they do?

For the year ending December 31, 2025, the Trust focused on its main job: collecting loan payments. The Trust successfully paid $142 million in principal and interest to investors. The operation is running smoothly. Independent auditors from Deloitte & Touche LLP checked the books and confirmed that the company and trustees are following all the rules and servicing loans as promised.

2. Financial Performance: A few warning lights

While operations are steady, the underlying loans show signs of stress.

• Loan Losses: The percentage of loans that went bad and were written off rose to 3.44% in 2025, up from 3.31% in 2024. This equals about $29.2 million in losses.
• Late Payments: Loans at least 30 days late climbed to 5.77%, compared to 5.34% the previous year. This equals roughly $49 million in late payments.

In plain English: some Harley riders are struggling to keep up with monthly bills. As a result, the "cushion"—the gap between interest earned and interest paid to investors—is shrinking.

3. Why is this happening?

Several economic factors are hitting wallets:

• Inflation: Rising costs for daily needs make it harder for customers to prioritize motorcycle payments.
• Higher Payments: The average loan amount grew by 4.2% due to higher bike prices and interest rates. This leads to larger monthly bills that strain borrower budgets.
• Lower Resale Values: When the Trust takes back a bike, it recovers less money. It now recovers only 42% of the loan balance at auction, down from 48% last year.
• Strategy Shift: Harley-Davidson is lending to more borrowers with lower credit scores to grow its market share. These borrowers now make up 18% of the pool, up from 15%. This naturally increases the risk of missed payments.

4. What should you watch for?

The biggest risk for investors is the economy. If inflation stays high or used bike values keep dropping, the Trust will likely see more defaults. Since the Trust passes loan cash directly to you, missed payments impact your returns and how quickly you get your money back.

On the bright side, there are no legal issues or scandals. The Trust also keeps a "Reserve Account" of $8.5 million. This acts as a safety net to cover interest payments if late payments spike unexpectedly.

Final Takeaway for Investors: If you are considering this investment, weigh the steady, audited track record against the current trend of rising delinquencies. The $8.5 million reserve account provides a buffer, but your returns are directly tied to the ability of Harley riders to manage their monthly payments in a tougher economic environment. Keep a close eye on future reports for any stabilization in loan loss rates.