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Car Leases are Dying
Posted: Sat Jul 26, 2008 8:47 am
by John Coffey
Chrysler is the first, but other manufacturers will follow.
Chrysler Cancels Leases August 1 Through it's Financial Arm
Dealers are being told not to lease any Chrysler vehicles through its financial arm after August 1, sources report. The carmaker is trying to control losses as its lending institution, Chrysler Financial, struggles with $30 billion in debt.
Declining values of SUVs and trucks, which Chrysler sells a large percentage of, have been worth less when they are turned in at the end of a lease. This translates to losses and increased debt. The company plans now to focus on convential financing.
It is thought that current Chrysler lease holders it will be unaffected. However, going forward, those people who enjoy the flexibility of leasing (not to mention the tax break) will have to look elsewhere. Chrysler said it will continue to offer "lease cash" incentives that can be used to lease through other lending institutions.
Consumers who prefer to lease a Chrysler vehicle can still do so through other channels such as banks. A Chrysler spokesman told Edmunds he does not think this change will have a big impact on consumer behavior.
An Edmunds analyst commented that Chrysler's move is not likely to be followed by Ford and GM because their fleets are more diversified. However, Ford yesterday announced it took a $2.1 billion hit in part by falling residuals of large vehicles.
Re: Car Lease are Dying
Posted: Sat Jul 26, 2008 11:09 am
by Marshall Grice
John Coffey wrote: A Chrysler spokesman told Edmunds he does not think this change will have a big impact on consumer behavior.
When asked to clarify his thoughts on consumer behavior the chrysler spokesman said "we'd actually have to have people interested in leasing our products before they care if we stop leasing them".
...or
Chrysler: our cars suck so bad even we don't want them back after the lease is up.
hahahah
sorry Steve.
Re: Car Leases are Dying
Posted: Sat Jul 26, 2008 12:02 pm
by Steve Ekstrand
Its a real problem for Cerebus if they don't offer leasing.... Because who'd really want to own a dodge car?
I have two Plymouths. Those are okay. And appreciating in value better than the stock market.
I have a Cummins Ram. I think Dodge may have had a small hand in it.
I have an SRT-4 that is awaiting its demise when the 2009 BMW 335 coupe rolls off the boat in Port Hueneme
Re: Car Leases are Dying
Posted: Sat Jul 26, 2008 1:55 pm
by Kurt Rahn
Chrysler: our cars suck so bad even we don't want them back after the lease is up.
Oooooooooofff
Re: Car Leases are Dying
Posted: Sat Jul 26, 2008 5:43 pm
by Giovanni Jaramillo
Steve Ekstrand wrote:when the 2009 BMW 335 coupe rolls off the boat in Port Hueneme
Steve, the LA Chapter does a tour of the BMW VDC in Port Hueneme (Oxnard). Barbeque food, drink and get to see how the cars come off the boat. It's a fun day event. Check it out.
Re: Car Leases are Dying
Posted: Sat Jul 26, 2008 9:31 pm
by Steve Ekstrand
I'm, uh... Familiar with the place.
Re: Car Leases are Dying
Posted: Sat Jul 26, 2008 11:53 pm
by Bob Hempy
Steve Ekstrand wrote:Its a real problem for Cerebus if they don't offer leasing.... Because who'd really want to own a dodge car?
I have two Plymouths. Those are okay. And appreciating in value better than the stock market.
I have a Cummins Ram. I think Dodge may have had a small hand in it.
I have an SRT-4 that is awaiting its demise when the 2009 BMW 335 coupe rolls off the boat in Port Hueneme
It's an interesting relief to watch the present distress of the automobile business from the comfort of the outside after selling cars for the past three years, some sixteen months of which was selling MOPAR. I'm in a growth industry now foreclosing on real estate properties, and driving my 2004 Dodge Neon SRT-4 some eleven hundred miles a week in the process. That means that I will accelerate the divestment of my financial interest/ownership of MOPAR products. Interestingly enough, I received a letter in the mail last week, from an F&I manager at the Dodge dealership where I sold my Neon to myself, offering me the opportunity to purchase a
lifetime powertrain warranty on the Neon.
Re: Car Leases are Dying
Posted: Sun Jul 27, 2008 9:40 am
by Steve Ekstrand
What good is a lifetime warranty from a company that won't be in business 3 years from now.
The mopar forums are full of people now with signatures that say "I will never buy a Chrysler product again".