Report: Ally eases credit threshold for Chrysler leases

Article by Christian A., on August 30, 2010

Ally Bank, the former GMAC, lowered Chrysler Group's credit-score threshold for its customers to qualify for a vehicle lease from 660 to 620. As a result of this move by Ally, Chrysler's preferred finance provider, the pool of lease customers has become wider. A 660 FICO score is on the lower end of prime, while a 620 score is on the upper end of subprime.

Chrysler sent a memo to dealerships this week, confirming that Ally had revised its minimum score. In addition, dealerships have confirmed the 620 figure.

The reason why this development is such a boost for the carmaker is that a credit score helps establish the interest rate that a bank will charge a customer for a loan. FICO scores fall anywhere from 300 to 850.

In July 2008, Chrysler's leasing business ended when its former captive finance company, Chrysler Financial, departed the leasing business. During this period, the resale value of its pickups and SUVs fell due to elevated gasoline prices. Leases accounted for about 22% of all Chrysler new-vehicle transactions in 2006, when Chrysler Financial was still its captive finance company.

Ralph Kisiel, a Chrysler spokesman, said that soon after Chrysler Financial left the leasing business, together with a majority of Chrysler's lenders, this percentage dropped to under 1% by mid-2009.

Kisiel added that since that time, lenders have resumed leasing and its corporate average has steadily risen to the current 4% to 6%. Kisiel added that the company is taking a disciplined approach to leasing and that it aims to remain competitive by providing numerous financing options.

He explained that leasing will account for less than 22% of sales and that Chrysler is comfortable with the current leasing levels. David Kelleher, owner of David Doge Chrysler Jeep in Glen Mills, Pa., and a member of Chrysler's National Dealer Council, said that dealerships will benefit from this change in extending lease offerings to more customers.

If you liked the article, share on:

Comments

Recommended

Mazda seems too far ahead in Safety technology for having four of its vehicles chosen as the safest on the road. Very recently, the Insurance Institute for Highway Safety has...
by - June 22, 2017
The automotive world is intensely competitive given the growing number of players, but the British car manufacturer is adamantly holding on to its spot. The 2018 Jaguar XF Sportbrake, priced...
by - June 22, 2017
Audi’s all-electric supercar, the R8 e-tron, had been discontinued last October after being in the market for under two years. The electric vehicle was then exclusive to the European market...
by - June 22, 2017
Dodge has made it clear to everyone, including its potential buyers, that the Challenger SRT Demon is a street-legal drag car - that it is unlike any of your ordinary...
by - June 22, 2017
After a number of failed attempts, Tesla finally gets an Arizona dealership license by winning a court battle that allows them to sell directly to consumers. The automotive dealer license...
by - June 22, 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