Chrysler Capital, the private-label preferred finance company for Chrysler Group, is one pace to achieve a first-year volume target on May 1 that will allow it to renew its contract with the US carmaker. The target was announced in an annual report recently filed by Santander Consumer USA, which in collaboration with Chrysler Group launched Chrysler Capital on May 1, 2013. Chrysler Capital offers prime and subprime auto loans and leases for Chrysler, Dodge, Fiat, Jeep and Ram truck dealerships as well as wholesale financing for dealers.
Santander Consumer USA replaced the carmaker’s former preferred lender, Ally Financial. According to the report, Chrysler Group could cancel its current contract if Santander Consumer USA fails to achieve target figures for its share of total Chrysler volume. From May 1, 2013, to Dec. 31, 2013, Santander Consumer USA originated more than $7.5 billion in Chrysler Capital auto loans as well as more than $2.4 billion in Chrysler Capital leases -- representing a 26.4-percent penetration rate on Chrysler’s total volume for the period.
Chrysler Capital targets to hit a penetration rate of 31 percent for the first year, 44 percent in the second year and 64 percent in the fifth year. In exchange, Chrysler Capital is entitled to limited exclusivity on Chrysler Group incentives, like loan and lease incentives. Since launching Chrysler Capital last year, Santander Consumer USA’s mix includes 30-percent prime-risk loans for the last eight months of 2013. In the full year 2013, Santander Consumer USA managed to more than double its auto loan and lease originations to around $19 billion, according to the report.