Chrysler To No Longer Lease Vehicles After September

Chrysler Financial will get out of the leasing business beginning Aug. 1, as the automaker shifts its incentive dollars toward vehicle purchases, the company announced Friday, signaling intensifying financial pressure on the automaker.

The decision to cut leasing costs suggests the Auburn Hills automaker is strapped for cash and its financial arm is having more difficulty acquiring credit, analysts said.

"I see this as indicative of some financial difficulty ... banks may not be willing to lend Chrysler money on the same favorable terms as in the past," said Aaron Bragman, automotive research analyst at Global Insight Inc. "It's very risky to leave the leasing business up to a third party. Some customers will go to competitors and they will lose volume."

 

Peyton18 - 7/28/2008 6:30:25 PM

+7 Boost

Next Step...Bankruptcy

EnnNorak - 7/28/2008 7:44:07 PM

+7 Boost

Get your cash ready to buy assets at the auction Peyton. Lessors have taken a huge beating as wholesale residuals fell far below wholesale values. I walked away from my Audi lease because the buy-out was $26K and the wholesale value was only $18K.

Peyton18 - 7/29/2008 12:50:34 AM

+4 Boost

I totally agree with that statement. Many financial advisors say NEVER LEASE A CAR, but the fact is, Leases are a good option for people who do not drive many miles, and for cars that naturally depreciate more than what they could be sold for. Also, maintenance costs after 3 or so years can be daunting, and again more than what the car is worth.

In chrysler's case...paying anything is more than what its worth

Maverick2020 - 7/28/2008 6:41:59 PM

+3 Boost

Chrysler is in a heap of trouble. And, unfortunately, it's only going to get worse.

If Chrysler's financial arm can't get financing for its vehicles, that means that that Wall Street has zero confidence in Cerberus.

truckmen - 7/29/2008 4:29:12 AM

+1 Boost

If Chrysler vehicles were better on gas they wouldn't be in this trouble to begin with! Gas price is dropping so maybe they will be saved? The oil companies realize that if they don't drop the price the alternative options will take hold and they will be finished! Lets hope the alternatives win! There will be almost no more wars, and we will not have to drive small cars around!

Peyton18 - 7/29/2008 10:47:20 AM

+2 Boost

only problem with that is, even though gas prices might go down a little, it doesn't mean chrysler has anything good to sell. I mean they still are peddling the PT Crusier! The 300 is looking stale, crossfire sits on lots, and who would get the "fancy" minivan over the dodge version?

just stupid.

Shredmo - 7/29/2008 12:37:16 PM

+2 Boost

Ahem, When they say Chrysler, they are including Dodge too.

M35MT - 7/29/2008 12:46:07 PM

+2 Boost

Back from vacation 009?