MotorAuthority

Chase Auto terminates leases for Chrysler vehicles

Posted Tue Jul 29 2008 6:21 PM by Viknesh Vijayenthiran

Chase Auto Finance announced today that it will no longer offer leases for Chrysler vehicles, following a similar announcement made on Friday by Chrysler Financial to stop its own leases on August 1. The reason behind the latest decision according to a Chase spokeswoman is because of fears of declining vehicle values.

Chrysler vehicles only represent between 1 and 2% of Chase’s auto finance portfolio, with most of its business involved with Subaru, reports Automotive News. Another reason for the decision was fears that Chases lease program for Chrysler vehicles could be flooded now that the carmaker is no longer offering its own leases.

Chase will end its lease program along with Chrysler on August 1, however the financial firm will continue to offer vehicle loans.

Following on news that Chrysler Financial and Chase is planning to terminate its lease underwriting business, GMAC has also revealed that it will do the same for the Canadian market and is considering cutting its U.S. leases as well. Ford, too, has announced it is having major lease difficulties as well. Unlike its competition, however, Ford will simply price its leases higher by readjusting residual values of several vehicles.

story Tags:

• Chrysler
• Industry

Reader Comments

• Tue Jul 29 2008 10:29 PM

  justin says

  NOT OFFERING LEASES!!!!!! WHY NOT STOP SELLING CARS!

• Wed Jul 30 2008 3:04 AM

  Sorin says

  There forgot the front door key at home. :) I don’t understand why, but I am convinced that they have an explanation. Theoretically revenues are substantially reduced when you give up at something like this. That explains why we don’t work there.:)

• Wed Jul 30 2008 3:05 AM

  Sorin says

  They...bla bla bla. Sorry

• Wed Jul 30 2008 8:02 AM

  Jim says

  Chrysler, dropping leasing is an indication of how close to bankruptcy the company is. If Chrysler was confident it would be around it would adjust the residual values of vehicles to reflect the current realities. This might make the cost of a lease too expensive for anyone to take it, but some would.
  
  Ford announced an increase in the lease cost for trucks and SUVs but cars continue as before. This reflects Fords confidence that they can weather the current difficulties. By not offering any leases, Chrysler is showing no such confidence. Chase recognizes that regardless of the residual assigned if Chrysler goes bust then the cars will drop in value.
  
  If Chrysler were to go bankrupt, it may simply go the way of Studebaker and Packard and disappear; as a brand only Jeep has value.