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Chrysler Financial to Cease Leasing Vehicles

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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

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

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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.

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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.

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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???

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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...

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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.

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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...

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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.

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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.

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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

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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 by CMG
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:confused0071: 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.
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:confused0071: 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.

:scratchchin:

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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!!!!!!!

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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.

:scratchchin:

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.

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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! :rolleyes: 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 by CMG
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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

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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. :P

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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.

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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. :P

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:

:deathwatch:

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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...

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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...

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