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.”



07/25, 4:16 PM
posted by:
A4
maybe they shouldnt sell crap like the sebring
07/25, 4:18 PM
posted by:
TOZO
What a mesed up move. This could be just some scheme by Chrysler to make buyers rush in by the end of this month (I think that’s when leasing ends) to lease all they can, and get more vehicles sold. Then Chrysler can bring leasing back leasing the following day. That would be the clever move, but I don’t think Chrysler is that clever.
07/25, 4:27 PM
posted by:
crackerhemi
how will implusive afford to lease his new sebring now???
07/25, 4:28 PM
posted by:
Nightblack_97
Wow… Chryslers depreciate so much in the first two and three years that leasing is no longer a money maker for them. that’s sad
07/25, 4:28 PM
posted by:
xyunya
TOZO, I don’t think it’s legal, never mind clever. Leasing is a risky business, and if Chrysler in auto business they don’t need to be in finance business. Banks and leasing companies will fill the void. Another part of equation, that there is not enough leasing going on at Chrysler. Leasing is professional financial vehicle, not benefiting blue collar all that much, except professional leasing. But banks will fill that void for their professional customers.
07/25, 5:02 PM
posted by:
RaineMan
As I said earlier… these are Chrysler’s death groans… it won’t be long.
07/25, 5:31 PM
posted by:
Impulsive
It’s not hard to understand why Chrysler is failing with this TURD … there are only so many worthless write-offs like “crackerhemi’ willing to buy such worthless garbage. Unfortunately for the company, those same write-offs they so dearly depend on don’t have the means to pay the lease costs and have to resort to driving used Aveos.
Poor Chrysler … if only they appealed to REAL people of worth.
07/25, 5:38 PM
posted by:
crackerhemi
You are hilarious. You own monkeys, huh? Dumbass zoo keeper. Go get a real job, so you can afford a BMW, faggot ass monkey keeper. Why do you keep so many monkeys for? Is it because you can’t get laid, and you have to abuse the monkeys?
07/25, 5:43 PM
posted by:
Impulsive
Copying and pasting the same reply in every thread is pathetic … but what else to expect from a worthless monkey rattling his cage at the zoo? Good show, chimp.
07/25, 6:54 PM
posted by:
beatusmongous
What’s wrong with owning a monkey? They’re funny little creatures that know how to steal beer, pull hair, and yank the front of a hottie’s shirt down. I see so many benefits in monkey ownership that I think Chrysler should buy some. Their investment into monkeys might actually prove to be fruitful for them.
07/25, 7:22 PM
posted by:
TOZO
So who owns monkeys? monkeys are all right. Anyway
xyunya, you may be right about the legal matters. It’s not good to trick the consumer. So I guess if Chrysler waits a few days, and then claims it “changed its mind” about its new no more lease policy, it could still get away with it. At least there are no unsuspecting shareholders to hurt. (If Chrysler was public, the stock would be worth nothing anyway.) So my undercover theory may just piss off 20% owner Daimler for a few days, unless its “in” on the secret.
07/25, 7:32 PM
posted by:
DialM4Speed
This is a great thing! Leasing is the stupidest idea in like ever!!! Why the hell would anyone want to spend years paying for something then turn it in to the dealer and hoof it outta there?
07/25, 7:44 PM
posted by:
brassmonkey
I like monkeys, too. Obama looks like one.
07/25, 7:48 PM
posted by:
DrFill
Monkeys don’t like you.
That’s why when they crap they don’t even bother to clean you.
Drill
07/25, 8:49 PM
posted by:
Impulsive
Wow, seems everyone enjoys the company of our resident chimp, ‘crackwhore’. You are the spectacle of our time. Now lick your balls and finger your ass. The crowd loves a good show.
07/25, 9:06 PM
posted by:
crackerhemi
Man, everyone is loving your monkey orgies, faggot impulsive.
Wow, seems everyone enjoys the company of our resident faggot: Implusive. You are the spectacle of our time. Now lick your balls and finger your ass. The crowd loves a good show.
07/25, 9:17 PM
posted by:
johnnycanuck
I don’t have enough business knowledge to judge this move by Chrysler but, speaking of monkeys, the original Planet of the Apes will always have a place amongst my favorite all time movies. Say what you want about the late Chuck Heston, but he was awesome in that type of role. Remember The Omega Man? The scene at the beginning where he drives that Mustang through the dealership window and cruises the empty streets of LA is just too cool.
Come to think of it, it probably won’t be long before you can do the same thing at your local Chrysler dealer. Maybe, thanks to Hollywood, I do understand a little about business. Thanks, Chuck.
07/25, 11:16 PM
posted by:
Xile
Did everyone see that video clip of the monkey grabbing the tranquilizer gun from the zoo keeper?
http://www.youtube.com/watch?v=6nA3bmU7-5c
07/26, 9:06 AM
posted by:
DeansterTJ
Johnnycanuck, the original Planet of the Apes was epic. We used to rent them all (I think there were 4 sequels?) and sit around getting wasted, making fun of Dr. Zaius and Cornelius. Those were some good times!
Speaking of Omega Man, did you see I Am Legend?
07/26, 10:37 AM
posted by:
monte
Does crakerhemi throw his own poo?
07/26, 11:06 AM
posted by:
ihustle
Chrysler lease percentage as a whole was under 20% for 2007. There future value is horrible. When they were leasing, it would actually cost them money. There at an industry low for leasing anyway. I know at my dealership,as a salesman, im @ a 92 percent lease penetration. It does not pay to buy vehicles anymore. A car or truck is the most devaluating big purchase that you can make. As soon as you leave the lot your vehicle is worth anywhere between 5-10,000 dollars less. At least with a lease you have a guaranteed future value. You also have options, you can trade, sell it, or keep it. With no penalty. You actually have options. On a purchase your stuck. They say 80% of america trades out of there vehicle before there finance term is up anyway, generally in neggative equity. You either buy certified used, or lease.*Fact of the day*
07/26, 12:17 PM
posted by:
ktulu
Chrysler is waning.
who would own 8 Chrysler dealerships?
the sebring ir tru crap
if Chrysler does a “gotcha” on leasing and brings it back da next day,they will lose even more cred.
This will make it tiuffer for people 2 get credit.
a chimp is not a monkey
Leasing makes ¢ in some sututations
Obama is smart & will win.
Not interested in watrching another nan lick your balls and finger jhis own ass. T
Apes R not monkeys, the original Planet of the apes was not bad,biut I prefer Flashdance.
07/26, 1:27 PM
posted by:
zoomzoomer
ROFL @ ktulu!
07/26, 2:45 PM
posted by:
Need4SSpeed
Wow, so now you can’t lease any Chrysler product at all???? The end of Chrysler is near….
07/26, 2:47 PM
posted by:
Need4SSpeed
no, nevermind, ok Banks will be handling the leasing financing for the Chrysler…
07/26, 6:13 PM
posted by:
lou3000
Wait, let me get this right. Chrysler cars are worthless as soon as you drive them off the lot so they will have to stop leasing. Instead they want you to BUY the car.
Yeah, that should work brilliantly.
07/27, 10:48 AM
posted by:
DeansterTJ
Ktulu, apes are not monkeys? Really? LOL!
07/27, 10:49 AM
posted by:
DeansterTJ
So I have this ****ing Wrangler for another 2.5 years on lease. Does anyone know if this affects me in any way? Any chance they’ll fold and ask for the car back? I’m sick of it already
07/27, 1:49 PM
posted by:
cocksterS
I’ve always been very interested in the relative advantages to leasing vs. ownership. This is what I understand so far:
.
I agree for the most part with xyunya, that the most significant benefits of leasing go to business interests (not just large corporations, but small businesses as well). Essentially, leasing allows them to deduct payments from their taxes. Technically, there are deductions available through ownership by way of “depreciation” of assets, but the rules are often not as consistent or favorable.
.
With the average Joe, leasing still has its advantages. Of course, a lot of this depends on prevailing interest/financing rates (ownership) vs. leasing incentives offered by the manufacturers (and 3rd party companies). I’ve done a few comparisons, and in the end, it’s all pretty much a wash, so neither is definitively cheaper. Don’t kid yourselves, even though it seems like you don’t pay for “depreciation” on a lease, the dealers aren’t that stupid. It is factored into your payments.
.
Finances aside, the turnover rate for new cars these days is becoming shorter and shorter, especially since newer cars are becoming more expensive to repair, and people try to get out before warranties expire. If overall cost is about equivalent, leasing gives you an opportunity to “swap” your car for a new one, without having to go through the hassle of selling it or trading it in, and thus suffering the loss that results from paying the middle man. Please reply if you’ve had different experiences. I’d like to hear more input.
07/28, 12:09 AM
posted by:
The Stig
Unfortunately, this will not be the only business sector Chrysler will be exiting. Not that it matters much – they can’t deliver a decent product anyway.
07/28, 12:33 AM
posted by:
Impulsive
‘crackwhore’ not only throws his own poo but he eats it religiously. I have to hand it to the chimp, he’s a good copycat … for a chimp.
07/28, 8:34 AM
posted by:
ihustle
*****ster* It does not pay to finanace a new vehicle any longer. As soon as you roll of the lot, you just took a loss of almost 10 grand, because now the vehicle is used. Thats with any brand.
With a lease there is a thing called GFV(Guaranteed future value) No matter where the market is, or how high gas is they will guarantee that your vehicle will be worth XYZ. Theres options sell for a profit, give it back, or keep it. If you keep it alot of times your buy-out is just about the same, as if you bought it from the beginning. The only reason you take an influctuation is because you have to finance the XYZ for three years instead of 5. So people keep re-leasing. It is in the benefit of the dealer to lease, but also the customer. Its a win-win situation. The difference is “options”
07/28, 11:06 AM
posted by:
stingbutt1
Well put ihustle. More and more people are fin. for 72 months but they want to get out of there car every 2-3 years. If you lease(as long as you go the full term) you don’t have to worry about being flipped. The market sucks for suvs in general so I would expect the other 2 detroit groups may follow suit. It’s realy unfortunate more than anything. Even bank of america is getting out of the used car leasing program even though used car leases were never that strong anyways.
07/28, 2:28 PM
posted by:
cocksterS
ihustle, for the most part, I agree with everything that you said. As stingbutt mentioned though, you’ve got to stick with lease for the full term, because you’ll get rocked if you decide to terminate early. The other problem with leases are that while they may give you “options” at lease-end, they’re strucutred very strictly, so that they give you fewer options for the duration of ownership/possession. Case in point: if you’re a medium to long distance commuter, you’ll find it difficult to stay within the 10k or so miles that’s assumed in the lease terms. With most dealers, increasing the mileage allowance has significant effects on a once attractive monthly lease rate. Bottom line is, if you plan on driving more than 12-15k miles per year, and in some cases, even more than 10, leasing is usually not your friend. As for gfv and depreciation, as i said, depreciation is still built into a lease term. GFV is nice to give you a feeling of extra security, but it’s implicit in the sale of a vehicle, in the sense that most buyers who have done their homework can project a minimum resale value at the end of their desired ownership term. I’m just playing a bit of ‘devil’s advocate.’ As I mentioned in my first post, I think leases are the better bet in this day and age. However, depending on your needs, it’s not always the most advantageous. (Just so you know, I lease my car).