Chrysler Financial Arm To Stop Leasing Vehicles

[Purveyor]

Source: Reuters

DETROIT, July 25 (Reuters) - Chrysler LLC said its financing arm would stop offering vehicle leases to U.S. consumers, a sharp break in strategy in response to tighter credit and the plunging resale prices for gas-guzzling trucks.

The abrupt announcement on Friday afternoon was the latest sign of the stress on Chrysler from an industry downturn that has hit all automakers. Earlier this week, Chrysler said it would cut 1,000 white-collar jobs by the end of September.

---
"You have got the dropping of the used car vehicle prices. You have got people that are struggling with the credit crunch," Porter said. "It is very difficult right now to offer competitive lease products. So we are switching our strategy."

---
Alan Helfman, a dealer at Helfman River Oaks Chrysler Jeep in Houston, Texas, said he was reassured that some of the local banks would finance his lease customers. Even so, he said, the news from Chrysler had been a shock, since it represented such a potentially disruptive break with the way sales have been made for years

"When I first got the news I was hoping that I could have had a second floor on the dealership so I could jump," he said, adding that he had relaxed after talking to local bankers.

Read more: http://uk.reuters.com/article/governmentFilingsNews/idUKN2545860120080725

[Yavin4]

1. Wow, This Is Really, Really, Really Bad for U.S. Autos

Practically ALL of their profits come from their financing divisions.

[Purveyor]

2. Sounds to me like the end may be near for Chrysler. Most of their

product line is SUV's and trucks yet I don't hear of any real push in smaller vehicle development.

I'll be surprised if there is a Chrysler as we now know it a year from now.

[TheDebbieDee]

3. It's a bad deal for Chrysler's lease processing personnel, too!

They just lost their jobs.

[pokercat999]

8. Closed ended leases require the lessor to correctly

judge the future value of the vehicle at the termination of the lease. If they use the actual numbers the cost to lease will be much higher (per month) than to buy. If they use traditional leasing numbers they will lose untold amounts when the vehicles are returned at the end of the lease. Right now if you are buying a new vehicle and driving less than 15000 miles per year leasing may be a very good choice of financing. Just remember you can and MUST negotiate the price the lease company will pay for the car. One of the reasons dealerships love leasing is that about 80% of the lessees do NOT negotiate the price and accept full MSRP!

[Festivito]

4. Makes no sense, then I realized... It's Dan Quale's Cerberus.

All they'd have to do is calculate a higher price to reflect the lower resale. But, no. They just want to lose customers comfortable with leases?

Cerberus also has 51% of GMAC. I did not know that. Poor GMAC.

Perhaps they'll become a menace as Gee-MACe.

Sorry.

[matt007]

5. Chrysler should just dissolve

They make horrible quality products. Gas Guzzlers are also their trademark. I could see Jeep getting sold off maybe. Chrysler and Dodge vehicles are just garbage. If Chrysler dies I think the U.S. auto makers will be better off.

I just feel bad for the factory workers. Screw everyone else.

[DainBramaged]

7. You don't feel bad for the workers, because you wouldn't make such a stoopid statement

if you did.

[earth mom]

9. We've owned 2 jeeps and they've been the best cars we've ever had. Haven't had one problem

with our current jeep since we bought it 5 years ago.

[BeatleBoot]

6. The Next Chapter in Chrysler's History will be...

Chapter 11.

Then

Chapter 7.

Close the doors and turn out the lights.