Chrysler bowed out of the leasing market completely last year as the company struggled with financial hardship, falling resale values and a tight credit market which made leasing impossible. Now the auto giant has emerged from bankruptcy and is taking a series of steps to capture its share of the leasing market once again.
The new leases will be backed by GMAC Financial Services, and any 2010 will be available for lease, but some models are eligible for special leasing rates. Included in the list are the Chrysler Town & Country minivan, the Dodge Caravan minivan, the Dodge Ram pickup truck, the Dodge Journey crossover, and the Jeep Wrangler and Liberty SUVs.
Leases are an important tool for dealers in luxury markets; in many cases, it makes the luxury or larger vehicles more accessible to the consumer through low monthly payments instead of the traditional full car loan. Leasing is also a useful option for buyers of non-luxury vehicles who simply wish to drive a car that may be slightly out of their price range otherwise.
For automakers, the risks associated with leasing vehicles are the same now as they always were. If resale values drop, automakers will be unable to recoup their money on the previously leased vehicles on resale or at auction. However, this is a risk the new Chrysler is willing to take In order to regain market share. Leasing is also considered a safer move than a full auto loan and Chrysler hopes that having the lease option on the table will attract consumers who may be a little hesitant to buy a Chrysler product.
Joe Spina, senior analyst at Edmunds.com, says, “This will be a benefit for consumers who like their products, but are unsure about the health of the company. Now they can get into a lease and not worry about the value of the car at the end because that will be Chrysler’s liability.”
Still, Spina reports that Chrysler’s leasing activity will not match what it was before the year-long halt. In the first half of last year, leasing accounted for a quarter of all sales. They will now cautiously re-enter the market, hoping that the new boost in sales justifies the risk.