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

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2010 Chrysler 300C SRT8

2010 Chrysler 300C SRT8

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Chrysler 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.

[Chrysler; Automotive News]

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Comments (2)
  1. Only a few years ago, the auto finance industry happily and accountably leased vehicles of all US makes and models. Many banks were involved and some ran a tight and profitable division of automotive ownership options. They didn't try to compete with the captives as they offered 36, 48 and 60 month terms and retained the lessee with end of term finance options. The indirect leasing business through smaller, regional banks actually held their own quite well. US Bank may be the one remaining source outside of the once well-funded captive lease sources and it should be a great partnership for Chrysler, Dodge and Jeep. In my opinion, leasing will return as a valuable option for the consumer especially as vehicles continue to rise in price and complexity. Used vehicle leasing is another option for the bank to capitalize on, especially with certified vehicles that have extended warranties. Remember that it's not all that important to an OEM to lease used models as their desire is to deliver more new cars. Leasing makes good business sense to as you’re driving a new or newer car, it will most likely be under warranty throughout the life of the lease and if you really like it, you can finance the residual and keep it. Keep those residual values realistic though, offer reasonable mileage allowances (10,000 mile lease ads are an annoying tease) and take the time to explain to the customer a lease to loan comparison that makes sense!
     
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  2. This is one more step in Chrysler's road to full recovery and it's future as a major international auto company.
    Chrysler sales have been steady in a tough economy, being the only domestic to show a sales increase last month,and it will launch many top quality products to join Grand Cherokee shortly as "best in class" offerings to expand sale dramatically. Imagine if Chrysler had the financials fully supporting sales how well they may have done. This is a big help.
    Chrysler customers know how well Chryslers are being built today and the word is spreading. With new product, Fiat influenced modernization, excitng styling, smart management, improved dealers, an expanded world-wide sales network and adequate financial supports the future looks impressively positive.
     
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