Chrysler about to sign a new preferred auto lender predicted to increase leasing for dealerships

Article by Christian A., on January 24, 2013

Chrysler Group is about to sign a new preferred auto lender that is predicted to increase leasing for dealerships. The automaker is "in the final stretch" of negotiations with the financial services provider, according to Chrysler-Fiat CEO Sergio Marchionne. He declined to identify this provider. But sources have told The Wall Street Journal that the lender is Banco Santander of Spain.

This lender will be the replacement of Ally Financial Inc. as the main lender to dealers and customers. At the Detroit auto show last week, Marchionne said that the agreement will permit Chrysler dealerships to boost shoppers' leasing options, which in turn can increase auto sales by having more consumers qualify for financing. He said that there's a piece of the market that the company is not presently accessing.

He also said that it doesn’t matter if the deal is done directly or 100% through a provider or in a combination with other sources because the company will be there. According to Reid Bigland, head of U.S. sales, Chrysler has some leasing programs currently but they make up just 10 to 13% of U.S. sales while the industry average is around 20%. He said that there will be “leasing element” in any deal that it has put forward.

He noted that the amount of leasing will rely on the dealers and the market. This arrangement would only affect sales in the U.S. and not in Canada. In July 2008, Chrysler cut leasing under former owner Cerberus Capital Management when financing through Chrysler Financial, Chrysler's previous captive finance arm, disappeared. Chrysler sales plunged without the leasing options.

Since Marchionne took over Chrysler, he has repeatedly said that it doesn’t require a captive finance arm to increase sales, inspite of dealerships wanting an in-house lender. He said that Chrysler has to focus on building profitable vehicles rather than attempting to make profits from auto financing. Marchionne told Automotive News that the new preferred lender will run in same way as other automakers' in-house lenders. It may even use Chrysler in its name.

Topics: chrysler, dealer

If you liked the article, share on:

Comments

Recommended

Automobili Lamborghini’s preparations for the production of its first ever sports utility vehicle, the new Lamborghini Urus, has reached new grounds as the Italian carmaker is disclosing plans to construct...
by - May 26, 2017
The upscale version of the GMC Yukon body-on-frame sport utility vehicle – the GMC Yukon Denali – has been refreshed for the 2018 model year. It now sports a new...
by - May 26, 2017
The largest gathering of Volkswagen and Audi cars in Europe is underway, and the German premium carmaker is displaying the third model of its G-Tron range at the 2017 Worthersee...
by - May 26, 2017
Have you been wondering how much you have to produce to acquire a 2018 Mercedes-Benz S-Class Facelift? Wonder no more, as Mercedes-Benz has already divulged the pricing – at least...
by - May 26, 2017
Following the M3’s new facelift earlier this year, BMW is once again bringing something fresh to the table. In its newest offering, a cheaper version of the high performance sedan...
by - May 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries