Report Says Chrysler Financial Will Stop Offering Leases

[69Firebird400]

According to a report in the online edition of today’s Wall Street Journal, Chrysler LLC has started telling its dealers that they will no longer offer auto leases through its Chrysler Financial subsidiary. The move comes as domestic automakers are seeing increasing losses as a result of lease write-downs, on top of the current credit crunch which makes credit less accessible and more expensive for companies that have a less-than-rosy outlook. You know, companies like Chrysler.

Companies generally incur large lease write-downs when the residual values projected for leased vehicles at the time of the lease origination are higher than the actual value of the vehicles –or the new projection of the vehicles’ values based on current market trends. Amidst Ford’s results released yesterday was a $2.1 billion charge against Ford Motor Credit Company attributed to its operating lease portfolio, so it’s not just Chrysler that is having this problem.

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[HoosierRon]

Chrysler's financial arm to stop leasing vehicles

DETROIT (Reuters) - Chrysler LLC's financial arm is planning to stop offering vehicle lease options to consumers and would focus on financing retail vehicle purchases, spokesman Bill Porter said on Friday.

"We are shifting our strategy to focus on retail products," he said. "Effective August 1 we will no longer offer lease products in the United States."

[Sinner]

And another nail gets hammered into the Big 3's coffin.

[baby-vortec2900]

Chrysler's falling out of the sky faster then a stalled Intruder loaded with bombs, lol( see sig )

But truely, this is not a good sign. When you have to make such drastic moves so suddenly, it really makes it look like you are doing everything you can not to fall at any moment. Sadly, this is true with Chrysler, and they will fall soon. These drastic measures can only hope to slow their demise.

Sinner: Hardly into the Big 3's coffin but rather into Chrysler's. Look for Ford and GM to pull through just as they did when times were tough before. Chrysler is just too far gone

[K Dawg ONE]

http://www.autoblog.com/2008/07/25/c...fering-leases/

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.

This is great for me at GM! As it is right now, Chryslers' Finance is like 12% and the lease are like 11%...w00t for a strong August for me (assuming this no lease will apply to Canada too)

[chevydlrmn]

I can understand that. They lose their @$$ on their own products. They currently have an incentive on purchasing your matured lease. Based on GMAC lease rates and residuals, it is obvious that GM only wants to lease certain vehicles (Silverado, Impala, Malibu).

[Jerrycan]

GM to stop leasing too?
http://www.financialpost.com/story.html?id=680397