Saturday Chrysler Financial has announced that it plans to exit the leasing business. In a bold move that has shocked the industry, this announcement was made on Saturday.
Spokesman Bill Porter announced, that the product mix in the United States will not include lease products in the United States.
The consumer market, as well as the erosion of residual values, have forced Chrysler, owned by Cerberus Capital to exit lease operations. As a large percentage of Chrysler product is trucks and SUV’s, which have fallen the greatest in recent times, it is hard to argue with Chrysler. It is just a very strange occurrence that they have announced to exit leasing in its entirety. To date, I’m not sure if any other manufacturer has done anything as bold as this. I know of GM and Ford’s push to decrease fleet sales by removing incentives, but this is the first change that I’ve seen as a reaction to aggressively combat declining residual values by the Big Three.
Several industry insiders are wondering exactly how Chrysler plans on making sales and continuing operations if it’s leasing services stop.
Leasing is a way for small and medium sized business to write down expenses by not directly purchasing vehicles, but rather a form of long term leasing.
