Chrysler’s Auto Finance business going the way of dinosaur

Citing changes in the mortgage industry as well as the overall economy, Chrysler has decided that as of August 1st, Chrysler Financial’s lease portion of its business will no longer be offered. The arm of that had produced approximately 20% of its total business.

This is not a huge surprise—with the demand for normally higher end models of cars, SUVs, and trucks, which made leasing much more attractive, along with sweeter financing deals such as zero percent financing over 72 months, the need for the business has in fact dissipated. Not that leasing for Chrysler cars will go away totally—private lenders will still be able to offer these deals—but Chrysler obviously sees that with potentially broadening the available models that be covered under these financing deals that people just won’t even see the need to lease.

Since Cerberus Capital Management, which owns Chrysler, also has a majority ownership of GMAC, it will be interesting to see if this move is kind of a “test” to see what the market does with the leasing not available directly from the company, because my guess is that if it is indeed successful, GMAC may follow suit.

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Chrysler’s Auto Finance business going the way of dinosaur

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