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Chrysler, U.S. Bank team up for vehicle leases

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Chrysler, U.S. Bank team up for vehicle leases



Chrysler and U.S. Bank are offering leases to new car and truck customers, the automaker and its dealers said today.

“Your customers now have a choice of finance sources to lease select vehicles. Special lease rates and residuals are now available through U.S. Bank,” said an e-mail sent to the automaker’s 2,400 U.S. dealers.

Ally Financial, formerly known as GMAC, will continue to be the largest provider of wholesale and retail financing to Chrysler dealers and their customers. But the agreement with Minneapolis-based U.S. Bank shows that leasing, which Chrysler stopped altogether before and during its bankruptcy restructuring, is now a viable option for more consumers.

Chrysler spokesman Ralph Kisiel said between 4% and 6% of Chrysler’s sales through the first eight months of 2010 were leases.

“It’s another financing source for us and another vote of confidence in the future of Chrysler,” said Bill Golling, a Chrysler, Jeep, Dodge and Ram truck dealer in Bloomfield Hills. “It’s good to have a degree of competitiveness between banks.”

Golling estimated that in 2007 and early 2008, leases accounted for as many as 90% of the vehicle transactions at his store. Now that is closer to 40%, Golling said.

Kisiel said the agreement with U.S. Bank extends only to such 2010 models as the Chrysler 300 and Town & Country, the Dodge Charger, Grand Caravan, Journey and Nitro, and the Jeep Wrangler and Liberty. All dealers may offer the U.S. Bank leases. It will not be available on Chrysler’s newest models such as the 2011 Jeep Grand Cherokee.

Ally recently adjusted its credit requirements for new vehicle leasing, said spokeswoman Sue Mallino.

“Ally still maintains prudent underwriting, and customers need to qualify for financing as always,” Mallino said. “But we want to help dealers strengthen their sales.”

Read more: Chrysler, U.S. Bank team up for vehicle leases | freep.com | Detroit Free Press http://www.freep.com/article/20100908/BUSINESS0103/100908066/1210/business01/Chrysler-U.S.-Bank-team-up-for-vehicle-leases#ixzz0z2LTnlqz

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Chrysler Ties Up With U.S. Bank To Expand Leases

By Bengt Halvorson

Deputy Editor

September 8th, 2010

2010 Chrysler 300C SRT8Enlarge PhotoChrysler has just inked a new partnership with U.S. Bank to expand leasing options.

Starting this month, a new leasing deal will be offered on new Chrysler 300, Chrysler Town & Country, Dodge Charger, Dodge Grand Caravan, Dodge Journey, Dodge Nitro, Jeep Wrangler, and Jeep Liberty models.

While Ally Bank remains Chrysler's preferred lender, Chrysler leases through U.S. Bank will be "at the most competitive rates and residuals available in the market today," according to message from Chrysler to its dealerships.

Ally had previously opened up leasing to higher-risk customers—those with a FICO credit score of 620 to 660, the upper end of subprime—and leasing is now accounting for about five percent of Chrysler sales. Back in 2006, under the former captive finance company Chrysler Financial, about 22 percent of Chrysler sales were leases, according to Automotive News.

General Motors has also been expanding lease availability; back in July it acquired the subprime lender AmeriCredit, which helped allow access to customers who would be shopping for vehicles in the $15,000 to $30,000 range, such as the 2010 Chevrolet Equinox and Malibu.

Automakers like leasing as it generally allows them to move higher-priced vehicles that are more generously equipped. That in turn can serve to help raise resale values (expressed for leases as residual value).

Residual values for both General Motors and Chrysler took a plunge in the months leading up to their 2009 bankruptcies; that's made leases especially difficult to arrange with the attractive monthly payments that brands with strong resale value, like Honda or BMW, are able to routinely offer.

At present, it's apparent that Chrysler wants to help move some of its better-equipped but slower-selling vehicles with the new strategy, though next year, with the introduction of the 2011 Fiat 500, Chrysler will be tapping into a new type of more upscale small-car buyer—such as that of Mini—that leases in larger numbers.

Also today, Chrysler offered expanded Consumer Cash incentives on many Dodge, Chrysler, Jeep and Ram-branded vehicles, as well as special bonus cash deals and reduced-rate financing through Ally Financial.



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