[Deep Gloss Auto Salon]

WOW!~!!

Chrysler Financial, the finance arm of Chrysler Holding LLC, will get out of the leasing business, according to two dealers who have been informed by company representatives. An announcement on the change was expected to be made during a 3:30 p.m. conference call today.

The move comes a day after Ford Motor Co. took a $2.1 billion charge because of a drop in residual values of its leased vehicles.

And earlier today, Honda Motor Co. said it expects falling residual values of big used vehicles in the United States to shave another 25 billion yen ($231.8 million) from its operating profit in the year to March 2009, according to a Reuters report.

Earl Hesterberg, chairman of Group 1 Automotive Inc., the nation's fourth-largest dealership group, reacted to the Chrysler news by saying:

"Their credit arm has been a competitive weakness before this action. I really don't see how they can be competitive at all in the marketplace with this kind of action. I have no idea how they can be competitive without any leasing at all."

[Denzil]

Wow, thank you gas prices.

[timpryor]

Doesn't bother me, I honestly dont understand why people lease to begin with

[Bunky]

Originally Posted by timpryor

Doesn't bother me, I honestly dont understand why people lease to begin with

From a beancounter perspective, it can make sense if you look at the time value of money.

[timpryor]

Originally Posted by Bunky

From a beancounter perspective, it can make sense if you look at the time value of money.

I may be able to see that from a very few persons perspective BUT if you drive as much as I do 20k+ miles a year leasing is actually alot more expensive since they only give you X amount of miles per year

[Brent]

Originally Posted by Bunky

From a beancounter perspective, it can make sense if you look at the time value of money.

I am a bean counter (CPA) and I did the TVM calculations on a car and I estimated what the car would be worth after the lease and it became very obvious to me why dealers push leasing so much. I felt I was using a pretty fair estimate of the car would be worth at the end of the lease.

However, with the value of SUVs dropping like they are, I can see why the American automakers are getting hammered. The less the resale value of a car when the lease is over, the less money you make on the lease. So if you leased an SUV a few years ago, you may be the exception and made out like a bandit when it is time to turn the SUV back in instead of trading it is for next to nothing.

[FMINUS]

Does that mean Chrysler will not lease PERIOD? Or just not through their own bank?

[Bunky]

Originally Posted by Brent

I am a bean counter (CPA) and I did the TVM calculations on a car and I estimated what the car would be worth after the lease and it became very obvious to me why dealers push leasing so much. I felt I was using a pretty fair estimate of the car would be worth at the end of the lease.

However, with the value of SUVs dropping like they are, I can see why the American automakers are getting hammered. The less the resale value of a car when the lease is over, the less money you make on the lease. So if you leased an SUV a few years ago, you may be the exception and made out like a bandit when it is time to turn the SUV back in instead of trading it is for next to nothing.

Yes. the market has changed the fundamentals. I like ownership so I do not listen to sage financial advice.

[Nica]

Interesting, I can see why leasing is important to some people as for me I've never leased a vehicle but the more I grow my businesses the more I see the important of leasing...oh well I don't take care of the fleet side of the business so I don't need to worry about it

[Deep Gloss Auto Salon]

Originally Posted by FMINUS

Does that mean Chrysler will not lease PERIOD? Or just not through their own bank?

Just not throught thier own financing arm