Chrysler Financial to Cease Leasing Vehicles

[vonVeezelsnider]

The old saying goes, ‘Desperate times call for desperate measures’, and it looks as though Chrysler will be heeding to that mantra. Chrysler Financial – the automaker’s financial arm – is planning to exit the leasing business, effective August 1st.

The news comes as most automakers are being hit with huge losses due to the reduction in residual value of leased vehicles. Ford has already taken a $2.1 billion hit from lowered residual values this year, and Honda expects the same problem to cost it $231.8 million through March 2009.

Although the move should save the automaker a significant sum on paper, some Chrysler dealers are baffled by the announcement. “I really don’t see how they can be competitive at all in the marketplace with this kind of action,” Earl Hesterberg, chairman of Group 1 Automotive Inc., the owner of eight Chrysler dealerships, told Automotive News. “I have no idea how they can be competitive without any leasing at all.”

From LeftLaneNews

[smk4565]

Probably a good idea since most Chrysler vehicles lose half their value in 2 years.

[Satty]

Good for Chrysler financial, bad for buyers who prefer leasing. It sends a bad sign to buyers that a company wont lease you a car because the value is going to tank.

[Paolino]

How many people is this going to tick off when they go into a dealership expecting to lease and find out they can't? I can't imagine this is something the dealers would want to advertise, and therefore I can't imagine many people would know upon walking in within the first couple of months. They're going to lose a lot of business.

[toesuf94]

Chrysler's losses are probably all tied to the residual drop on the Commander alone! (kidding, kinda!)

I wonder if this will stop sales altogether...as how many buyers will they find if they KNOW you will loose HALF of the retail value as soon as you drive off the lot? Plus, other than the Challenger, Charger, and the Jeep Wrangler unlimited, what does Chrysler offer that you would be willing to buy knowing what you will loose as soon as you sign the paperwork???

[Ravenfreak13]

NOOO! What am I gonna do when I give my Avenger back....I'm gonna want a new one one '11!

[Newbiewar]

u can get a lease from a different company...

this is nothing that will affect consumers... except there wont be lease incentives... no promotional rates, at least nationwide... dealers can work with their prospective banks to establish promotional rates... most leases are from other banks anyway...

[haypops]

How many people is this going to tick off when they go into a dealership expecting to lease and find out they can't? I

Won't they still be able to offer leases through banks etc. Won't be cheap though.

[Newbiewar]

Won't they still be able to offer leases through banks etc. Won't be cheap though.

ahh shouldnt be too bad, the lease programs always have to have a competative edge over a purchase, so... it wont be that bad, i never sold a lease to GMAC while i was at the dealership for a year...

[enzl]

They've found 3rd party lease providers for any dealer that wanted it, according to what I've seen & heard.

It's certainly not a vote of confidence, regardless.

[CARBIZ]

Leasing is big, big business around here. Half my portfolio are leases. The last national stats I saw for Canada put leasing somewhere around 43%. Chrysler is advertising huge cash incentives and ugly 'bi-weekly' payments for 60 months, but with 72 month amortizations around here. That is going to mislead and piss a lot of people off. Wait until they find out they have a balloon payment and they are forced to buy it out!

Judging by two battling Chrysler dealers I saw in a local paper the other day, it is not going to be pretty for them. One dealer is advertising a T&C LTD for $27,998, but the fine print states it is for Air Canada employees, Aeroplan employees and Chrysler employees only. Two pages later, another Chrysler dealer, clearly pissed off at the first one, declares 'sale prices should be for everyone,' and advertises a more basic T&C for about the same price. Both advertise at 7.99 rates and 'bi-weekly.' This is going to piss off and confuse a lot of buyers. I do not understand why these dealers would advertise this way. What's worse, why do consumers put up with that BS?

A big helping of not good. Chrysler's desperation is showing. The sharks will smell blood in the water, though.

[gm4life]

This is stupid.

[CMG]

Probably a good idea since most Chrysler vehicles lose half their value in 2 years.

Yeah, those Hemi Cudas at Barrett Jackson are LUCKY they weren't leased!

LOL

[CMG]

With the economy down there turning sour and prices of vehicles dropping it's almost a GOOD thing for Chrysler financial to back out of at the moment... bad for business maybe, but good for financial reasons I bet.

Besides, cars of ANY make can still be leased, just that Chrysler financial won't be doing it.

I don't see the big deal to be honest.

BTW- I just read THIS VVV self explanatory if you ask me...?

Ford has already taken a $2.1 billion hit from lowered residual values this year, and Honda expects the same problem to cost it $231.8 million through March 2009.

Edited July 26, 2008 by CMG

[toesuf94]

what does a 1970 Hemi Cuda at Barrett-Jackson have to do with Chrysler discontinuing the holding of it's own paper on leases for NEW CARS? It took 38 years for those cars to be worth something again...and they are only worth it because a bunch of rich guys are having a penis sizing contest with their checkbooks by out spending the last idiot who bid up a car that is not worth nearly what is being paid.

[CMG]

what does a 1970 Hemi Cuda at Barrett-Jackson have to do with Chrysler discontinuing the holding of it's own paper on leases for NEW CARS? It took 38 years for those cars to be worth something again...and they are only worth it because a bunch of rich guys are having a penis sizing contest with their checkbooks by out spending the last idiot who bid up a car that is not worth nearly what is being paid.

I bet if YOUR car was worth 4 million dollars you would be in that penis sizing contest pretty danged quick!

LOL!!!!!

My reply had nothing to do with leases, it had everything to do with the quote that I replied to!

Just look above what I replied in the QUOTE BOX.

[CMG]

Won't they still be able to offer leases through banks etc. Won't be cheap though.

Who do you guys think controls GMAC?

LOL

CERBERUS!!!!!!!

[VenSeattle]

I bet if YOUR car was worth 4 million dollars you would be in that penis sizing contest pretty danged quick!

LOL!!!!!

My reply had nothing to do with leases, it had everything to do with the quote that I replied to!

Just look above what I replied in the QUOTE BOX.

How is Plymouth these days? I can't wait to see that $4 million Breeze, Sundance, or Neon at an auction.

The comment quoted stated most Chrysler vehicles. Yes, Chrysler has an excellent track record producing specialty cars... but their everyday bread-n-butter vehicles drop value like a rock.

[CMG]

How is Plymouth these days? I can't wait to see that $4 million Breeze, Sundance, or Neon at an auction.

The comment quoted stated most Chrysler vehicles. Yes, Chrysler has an excellent track record producing specialty cars... but their everyday bread-n-butter vehicles drop value like a rock.

How is Oldsmobile?

I can't wait to see a 4 million dollar Camaro, Corvette, etc etc.

Forget the entry level daily driver's. LOL What a comparison! C'mannn Ven! :AH-HA_wink:

All the domestic bread and butter vehicles are dropping "like rocks".

We have a Solstice that is ONE YEAR OLD in our Craigslist with 33% depreciation. LOL

Want me to post it?

HERE! http://vancouver.en.craigslist.ca/car/770296936.html

Let's hear some clever excuses Ven!

ALL domestics have a resale problem, you are just blind to what you don't want to see.

Edited July 26, 2008 by CMG

[Newbiewar]

Who do you guys think controls GMAC?

LOL

CERBERUS!!!!!!!

I still wouldnt be supprised if cerberus combined the two, GMAC and Chrysler Financial. Sold it back to GM... Build their own Financing for Chrysler. its worth money to split chysler up, but it would be easy to start a new one because of the customer base... to me seems like a decent idea...

i need to look at cerberus, see what kind of investor they are... a buy and sell or buy and hold... weather they are like Buffett or like Kirkorian...

Buffett style investing will grow the biggest but Kirk's way will show major gains faster

[VenSeattle]

I have no excuses... I'm not the one defending Plymouth... or Oldsmobile... your goat is just too easy...

Couldn't you have at least picked a Chrysler vehicle from a brand that still existed? Your point just validated that a brand's past doesn't have much, if any (in Plymouth's case), to justify its current existence. Once the Viper is gone, where's Dodge? Where is Chrysler's future $4 million vehicle? pehaps the 300 SRT8. Jeep will always have the Wrangler.

I thought ruffles were just a chip.

[Satty]

All the domestic bread and butter vehicles are dropping "like rocks".

We have a Solstice that is ONE YEAR OLD in our Craigslist with 33% depreciation. LOL

The Solstice is...um....special. They dive in value because all the people who actually want them (middle-aged woman and gay guys) already have them, and when they find out how useless they are, they cant find another middle-aged woman or gay guy to buy it.

I haven't gotten a good Solstice bash out in a while, I feel better.

[CMG]

I have no excuses... I'm not the one defending Plymouth... or Oldsmobile... your goat is just too easy...

Couldn't you have at least picked a Chrysler vehicle from a brand that still existed?

I thought ruffles were just a chip.

I'm not "defending" Plymouth. LOL Tell me where you jumped to THAT conclusion?

LOL!!!!

If you look, I'm not gonna suggest YOUR goat is hard to get, it's easy, the only difference is I can stick to logic, and fact.

:AH-HA_wink:

[CMG]

The Solstice is...um....special. They dive in value because all the people who actually want them (middle-aged woman and gay guys) already have them, and when they find out how useless they are, they cant find another middle-aged woman or gay guy to buy it.

I haven't gotten a good Solstice bash out in a while, I feel better.

The strange part is the Solstice is SUPPOSED TO BE an "enthusiast's car".

It should have a heckuva better resale than most, should it not?

All domestics are going to have resale problems over the next few years I am sure, GM, Ford, and Chrysler. To single one out is silly IMO...

[VenSeattle]

I'm not "defending" Plymouth. LOL Tell me where you jumped to THAT conclusion?

LOL!!!!

If you look, I'm not gonna suggest YOUR goat is hard to get, it's easy, the only difference is I can stick to logic, and fact.

Hah! - Twisted and selective perhaps...

[CMG]

I have no excuses... I'm not the one defending Plymouth... or Oldsmobile... your goat is just too easy...

Couldn't you have at least picked a Chrysler vehicle from a brand that still existed? Your point just validated that a brand's past doesn't have much, if any (in Plymouth's case), to justify its current existence. Once the Viper is gone, where's Dodge? Where is Chrysler's future $4 million vehicle? pehaps the 300 SRT8. Jeep will always have the Wrangler.

I thought ruffles were just a chip.

You keep changing your posts!

Is the Viper "cancelled" like was posted on Cheers and Gears, or was a blog misinterpretted?

You tell me Ven!

:AH-HA_wink:

Who said there will be ANY domestic auto manufacturer a decade down the road..?

Maybe once Hummer is sold (it IS being shopped, isn't it? :AH-HA_wink: ) Jeep might rebadge the Wrangler as a Hummer...? LOL

[CMG]

Hah! - Twisted and selective perhaps...

"Selective" is at each POSTER'S DISCRETION. You obviously know that Ven...

:AH-HA_wink:

Twisted requires imagination, and it needs to be pointed out to be labelled as "twisted".

Point out what you are referring to, I can do the same.

It will be fun.

[Satty]

Actually, based on just playing around for a few minutes on Edmunds, it appears GM is doing better on resale value, at least with the Malibu and CTS. The Cobalt sucks nearly as bad as the Cavalier did and the Impala loses 90% of its value as soon as the paperwork is signed, so its not company-wide, but GM is slowly but surely getting there.

[CMG]

Actually, based on just playing around for a few minutes on Edmunds, it appears GM is doing better on resale value, at least with the Malibu and CTS. The Cobalt sucks nearly as bad as the Cavalier did and the Impala loses 90% of its value as soon as the paperwork is signed, so its not company-wide, but GM is slowly but surely getting there.

I think the actual CAR resale value won't matter as much as the ECONOMY as far as dollar figures go.

GM has come a long way with their vehicles, but the times are tough with gas prices and the economy right now, it's a 1-2 hit that's hard to get around....? Tough times to be an automaker for sure.

Edited July 26, 2008 by CMG

[VenSeattle]

Oh... a future classic in the making. Chrysler sure knows how to guarantee its place in a collector's heart.

[CMG]

Oh... a future classic in the making. Chrysler sure knows how to guarantee its place in a collector's heart.

LOL

I have never seen an ADMIN troll on his own forum...

Too funny!

Show me where you figure the Viper is gone in 2011, and I will show you just how wrong you are.

Post a link!

LOL

[Satty]

A link

Another

[haypops]

All the domestic bread and butter vehicles are dropping "like rocks".

We have a Solstice that is ONE YEAR OLD in our Craigslist with 33% depreciation. LOL

Brand new dodge Ram pickups with a lifetime warranty (maybe even with guaranteed $2.99 gasoline) are going for more than 50% off list.

[Newbiewar]

Brand new dodge Ram pickups with a lifetime warranty (maybe even with guaranteed $2.99 gasoline) are going for more than 50% off list.

well if u sell the dodge, it looses its lifetime warranty.. so that makes it much less valueable... everyone said it would decrease resale value to have a lifetime warranty that wasnt transferable, now they arent leasing there vehicles... omg... combine that with a credit crunch and a housing crisis, and high fuel prices... and the sky is falling

[Intrepidation]

As others have said, there are other ways to lease, so it probably won't be a huge issue, but it doesn't do Chrysler's image any favors either.

[Newbiewar]

As others have said, there are other ways to lease, so it probably won't be a huge issue, but it doesn't do Chrysler's image any favors either.

i agree, i doubt anything negative will come of it... banks really dont care what other banks think residual values are... they use their own info or a thirdparty such as KBB...

from cerberus's point of view, it removes variables in return... makes profit more certain. nothing but a smart decision that will not hurt the consumer.

[daves87rs]

This is stupid.

Agreed.

Plain and simple.

[daves87rs]

Oh... a future classic in the making. Chrysler sure knows how to guarantee its place in a collector's heart.

[Ravenfreak13]

So I can still lease an '11 Avenger??? YAY!

[Newbiewar]

So I can still lease an '11 Avenger??? YAY!

the dealership will be able to get you a loan, or you can always goto wells fargo or whomever... i say wells fargo, because i think they like to give leases out...

[Ravenfreak13]

works for me!

[LosAngeles]

The Solstice is...um....special. They dive in value because all the people who actually want them (middle-aged woman and gay guys) already have them, and when they find out how useless they are, they cant find another middle-aged woman or gay guy to buy it.

Maybe the upcoming coupe or a V-8 engine swap culture might change that?

[Satty]

The Targa doesn't do a whole lot to address the complete lack of luggage space. A V8 swap is too much work for the type of casual car buyers (middle aged women and image conscious gay guys) who are interested in the Solstice. The Solstice is still inferior to the Miata, and in some respects even the Sky.

[A Horse With No Name]

The Solstice is...um....special. They dive in value because all the people who actually want them (middle-aged woman and gay guys) already have them, and when they find out how useless they are, they cant find another middle-aged woman or gay guy to buy it.

I haven't gotten a good Solstice bash out in a while, I feel better.

Your post is assinine.

Solstice values are falling because they are a specialty car and the economy is weak.

Look at the value of a Z4 BMW, Miata, Sky, S2000...or even a vette, 911, Boxter, etc.

Chris

[A Horse With No Name]

The Targa doesn't do a whole lot to address the complete lack of luggage space. A V8 swap is too much work for the type of casual car buyers (middle aged women and image conscious gay guys) who are interested in the Solstice. The Solstice is still inferior to the Miata, and in some respects even the Sky.

Let's see, the highest finishing Solstice in SCCA Showrom Stock "B" at last years runoffs in Topeka, Kansas was "First"

The highest finishing Miata was "eighth."

The Miata is in some ways a better car, but the Solstice is a hell of a car. Get over not being man enough to buy/drive one, dude.

Chris

[A Horse With No Name]

Brand new dodge Ram pickups with a lifetime warranty (maybe even with guaranteed $2.99 gasoline) are going for more than 50% off list.

A friend wanted to trade her two year old F150 in on a Fusion and the local Ford dealer wouldn't even talk to her.

When I bought my Miata (used) a two year newer and nicer Pilot was $2500 cheaper than the Miata.

My other friend can't give his Tahoe away.

What's your point?

Chris

[A Horse With No Name]

As others have said, there are other ways to lease, so it probably won't be a huge issue, but it doesn't do Chrysler's image any favors either.

+1

Chris

[A Horse With No Name]

So I can still lease an '11 Avenger??? YAY!

Not to be cruel...but once you drive a Civic/Fusion/Milan/Malibu/Aura/Astra/Mazda 3/VW Rabbit/GTI/Cooper/CooperS/Jetta...et al...you won't want to.

At some point Chrysler is going to ahve to start building much better cars if they want to stay in buisiness.

Although it would be cool to build "continuation" Challengers like they built continuation Studebaker Avanti's.

Or maybe we can get Dynacorn to build a 70 challenger Body. We could run two lines, kind of like the beetle plant in Mexico, where both the old beetle and new beetle were built alongside each other.

Two kinds of challengers, set up however you want...I could get into that.

Chris

[Satty]

Your post is assinine.

Solstice values are falling because they are a specialty car and the economy is weak.

Look at the value of a Z4 BMW, Miata, Sky, S2000...or even a vette, 911, Boxter, etc.

Chris

The Solstice (and Sky, to be fair) are dropping in value because they require quite a bit of comprimise. Between the pain-in-the-ass top and complete lack of storage space, the market for them is extremely limited. Mazda did it better, they made a weekend toy that allows a person to take along enough provisions for a weekend.

Let's see, the highest finishing Solstice in SCCA Showrom Stock "B" at last years runoffs in Topeka, Kansas was "First"

The highest finishing Miata was "eighth."

The Miata is in some ways a better car, but the Solstice is a hell of a car. Get over not being man enough to buy/drive one, dude.

Chris

Whens the last time someone bought a car based on SCCA results? I have no need to buy a Solstice (or Miata) because they really dont go well with a carseat. I want a 3rd car, and I'd love a convertible, but a Solstice, Sky, Miata or Corvette are out of the question. A Wrangler, however, isn't.

[A Horse With No Name]

I'm not saying the car is sold by SCCA results, nor am I saying it is as good as the Miata. (I own a Miata and could have bought a Solstice)

I am saying the Solstice has Merit.

BTW, I agree on the Wrangler thing. My teenaged son will soon be driving and I have a teenaged daughter that will follow him in short order.

I figure the Wrangler is one of the few things on the planet tough enough for them not to destroy...and it is a ragtop.

Chris