• Jul 25th 2008 at 4:08PM
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Chrysler LLC's financial division will no longer be offering leases to U.S. consumers on Chrysler products as of August 1st. The automaker will be holding a conference call with dealers later today to go over the changes and the reasons behind the decisions, but Chrysler spokesperson, Bill Porter, told Reuters "We are shifting our strategy to focus on retail products."
The move comes amidst Chrysler's attempt to get 20 banks to renew a $30 billion credit facility for the automaker's financial arm. The rise in borrowing costs next month will make it more difficult for Chrysler to offer low-interest loans and could spell further disasters on the sales front.

Thanks to all who tipped in.

[Source: Reuters, WSJ]

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    • 1 Second Ago
      • 7 Years Ago
      I think we're all beginning to see who the next big auto maker to go down will be.
        • 7 Years Ago
        Not being able to lease the Chrysler 300C is like a gunshot to the arm.

        I don't think Chrysler will be allowed to go under, but it makes me wonder how f*cked up America is gonna be in the next 4 years if our banks, our airlines and our car companies can't survive.

        If Congress had any balls at all, they'd have already imposed huge taxes on Japanese imports and German imports, as well as the cars they produce on our land.
        • 7 Years Ago
        Can't wait to see that happens to Chrysler, hopefully followed by GM.
        • 7 Years Ago
        It was inevitable the minute, DC sold C.
        • 7 Years Ago

        If you take an economics course you'd learn that raising taxes and imposing tariffs on foreign imports only raises the costs of cars in the US and reduces the amount of cars we can export overseas. Unless you want the country to pursue protectionist policies and not import anything from abroad, your idea would just slow down the economy even more.
      • 7 Years Ago
      I would love to know what type of Vaseline Dr. Z used to shove Chrysler so far up Cerberuses behind that smart people like Cerberus and all their billionair backers could not see the mess they were inheriting.
        • 7 Years Ago
        Steve, No Vaseline required with Cerberus... unless EGO is a new brand of lube!!! A bunch of ex GE Capital guys & ex Bush White House jumpers running things.

        My God, they put Bob Nardelli, fresh off his stellar job @ Home Depot (sarcasm on heavy...) in charge of Chrysler instead of Wolfgang Bernard (sp?) who at least had guided DCX;s Chrysler under its better times.

        No leases offered through Chrysler Financial? Bye-Bye to all those buyers looking for cheap deals (a HUGE chunk of Chrysler's customers).

        Not good news... perhaps Cerberus plan to take Chrysler Chapter 11 & bust the UAW contracts & their responsibility to their non union retirees??? JMO.
      • 7 Years Ago
      So they basically are kissing 20% of their sales goodbye. Well a little less than that because not everything is leased thru Chrysler Financial. But honestly, what 3rd party is going to offer supported residuals/rates on a Chrysler product?

      But the point is...they honestly think they're going to convert lessees to purchase? HAHAHA. These people will just lease from another manufacturer, it's that simple. I understand they are just insulating themselves from their rapidly declining residuals, but the customer doesn't have much of an appetite to absorb this massive loss, either.

      I am interested to see how employee markets will be hit as a result of all this. After all, those are Chrysler's largest markets, and highest lease percent as well. I think this is the point where employees just say "forget it", and either lease a competitive make, or if they DO buy (as Press is so keen on), they buy a 2-year-old used vehicle.

      Press is trying to downplay this by saying "the advantages of leasing are gone..." Yeah, right. Maybe for Chrysler, but sorry Jim, you aren't converting lessees to purchase. It just ain't gonna happen. Good luck with all that.
      • 7 Years Ago
      I wish you people had all your facts straight...

      Okay so Chrysler Financial isn't doing leases? Who cares? It's smart on their part, because the low leases that Americans are used to are killing the industry. Ford Motor Credit wrote off $2 BILLION last quarter in lease residuals alone!

      Also, you can still lease a Chrysler with the same old rebates, you just go through a different bank. My local dealership has been using other banks as well for a while, and guess what? Some of them are actually cheaper! Stop making statements that this is the end of Chrysler, and RIP etc, on all these pages, because it just makes you sound ignorant.

      Chrysler is no longer being run by people who don't care about an 8 Billion Dollar quarterly loss, they are bean counters, and if a part of the business is losing money, they are going to change it. I find it funny that you people all want Chrysler to go under, and I wonder, do these people live outside the USA? Because if you don't, you're in for a real shock when things like that actually start happening, like $25 for a loaf of bread, and gas prices closer to that of Sweden ($9.00 per gallon)
      • 7 Years Ago
      This is really bad. Sure you can get a lease through a bank but it is going to cost you too much. There goes those attractive next to nothing a month payments advertised in the paper. Retail sales will tank and that is where the money is made.

      What Chrysler will become is the absolute king of rentals and fleets. Since they will no longer have to worry about residuals they can throw their cars at every fleet buyer without regard and with other automakers weaning themselves off fleets they could move a lot of cars. A strategy that wont make them much money but will keep the factories running and the bills paid. This also means though that you would have to be a fool to buy a new Chrysler and expect it to hold any value.

      Long term I see it as a huge mistake. The brand will lose what little value it has left especially when they have to decontent the vehicles to continue making a profit on them as fleet specials.
      • 7 Years Ago
      • 7 Years Ago
      I wonder if Jim Press regrets his decision?
        • 7 Years Ago
        No... execs usually get a lot of upfront $$$ & golden shutes at the end of their half-a$$ job.

        Toyota's dead weight was NOT Chrysler's gain
      • 7 Years Ago
      I recently bought a used small pickup as a work truck for my cabin in the sticks of WY. It was purchased from a mega-dealer in SoCal. During one of our conversations the sales guy offered at the moment no one wants a large car or SUV. Said he's never seen anything like it in his 15 years selling cars at this dealer (they sell most all brands, foreign and domestic).

      He also noted most of the people trading in their large cars and SUVs to buy 4-cylinder vehicles still owe big money on their trade-in. Also noted a lot of folks are doing whatever it takes to get out of their lease, just to put themselves in a 4-cylinder. As bad as it might be out there, taking that kind of hit on a vehicle you own money on does not make economic sense. In most cases you're smarter just to buy the gas.

      He specifically mentioned Tahoes and Surburbans, but the worst was the Ford Expedition.

      Although the price of gas has gone down in the past couple of weeks. I fear this thing has a lot more down side before it gets better.
      • 7 Years Ago
      If Chrysler's financial arm won't finance a vehicle because their residuals are so bad, why would anyone buy one with traditional financing? All they are doing is telegraphing to the world that "yeah, all our vehicles are junk before they're paid off, and we can't sell 'em after 3 years without losing our arses".

      With a message like that, why would I shop there with my money?
      • 7 Years Ago
      The good news is they aren't really missing out on that much lease business, since no one was lining up to lease anything from Chrysler anyway.
        • 7 Years Ago
        No, losing a lease option is NOT "good news"... especially for an automaker like Chrysler that is struggling for sales... ANY kind of sale (yes, leases are counted as "sold")

        I understand the banking issue.... but NOT GOOD!!!
        • 7 Years Ago
        About the only reason they were selling '08 Rams was with low lease rates and/or $15,000 off sticker........they're going to be in deep trouble if they can't offer leases anymore!
      • 7 Years Ago
      Chrysler Corporation


      1 August 2008
      • 7 Years Ago
      Well, Wells Fargo pulled out of the leasing game to. They were one of the companies that you could lease for 60months through.
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