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It's Official, Chrysler is on Life Support.......
Old 07-25-2008, 02:21 PM   #1
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It's Official, Chrysler is on Life Support.......

Chrysler won't offer auto leases through lending arm: report - MarketWatch

It doesn't sound all that bad, but it is............
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Old 07-25-2008, 02:24 PM   #2
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Chrysler won't offer auto leases through lending arm: report - MarketWatch

It doesn't sound all that bad, but it is............
They just have to find some other finance company willing to own Chryslers for too much money at the end of the leases. I guess they got tired of losing 2 to 5K a copy at the auction. Look out below!
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Old 07-25-2008, 02:28 PM   #3
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They just have to find some other finance company willing to own Chryslers for too much money at the end of the leases. I guess they got tired of losing 2 to 5K a copy at the auction. Look out below!

I guess the $2.99 a gallon thing didn't turn things around........

Isn't it now standard practice for Chrysler Financial to buy a gap insurance policy on new car leases to mitigate the loss at the auctions? The main reason GE Capital got OUT of leasing was the bloodbath they took at the car auctions on lease returns.................
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Old 07-25-2008, 02:31 PM   #4
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I guess the $2.99 a gallon thing didn't turn things around........

Isn't it now standard practice for Chrysler Financial to buy a gap insurance policy on new car leases to mitigate the loss at the auctions? The main reason GE Capital got OUT of leasing was the bloodbath they took at the car auctions on lease returns.................
Gap insurance is only good if the car is stolen. I would guess they would lose less $ if the car was stolen rather than taking them to the auction.
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Old 07-25-2008, 02:31 PM   #5
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It's hard to make money leasing vehicles that have horrific depreciation.
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Old 07-25-2008, 02:33 PM   #6
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It's hard to make money leasing vehicles that have horrific depreciation.
GM figured it out, just limit the customer to 700 miles a month (when most folks drive 1000-1250 miles a month), and make them build in mileage to limit the damage.........
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Old 07-25-2008, 02:33 PM   #7
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Who would intentionally steal a Chrysler??
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Old 07-25-2008, 02:34 PM   #8
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Who would intentionally steal a Chrysler??
I'll bet Walter P. is rolling around in his grave now.............
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Old 07-25-2008, 02:34 PM   #9
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GM figured it out, just limit the customer to 700 miles a month (when most folks drive 1000-1250 miles a month), and make them build in mileage to limit the damage.........
Yeah, they figured it out. BK next stop.
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Old 07-25-2008, 02:36 PM   #10
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FD, you've been out of the business too long. What does Gap ins. have to do with losing money at an auction?
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Old 07-25-2008, 02:56 PM   #11
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FD, you've been out of the business too long. What does Gap ins. have to do with losing money at an auction?
Perhaps my knowledgeable sources in the car industry are losing their marbles. I am not talking about the gap insurance that folks buy to make up the "gap" between the value they owe and the ACV in the event of collision damage.

A factory guy I know (reliable source) that most automaker's financial arms in effect reinsure their leased vehicles with a type of wholesale gap insurance against large vehicle losses. Of course, there are limits to this coverage, there is a cost to get it, and the reinsurer has the option to cancel a contract to offer it if market conditions sour.

i doubt he was lying to me, it seem plausible..........:confused:
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Old 07-25-2008, 02:57 PM   #12
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Yeah, they figured it out. BK next stop.
Maybe GM will be able to buy up the profitable "pieces" from a Ford and Chrysler implosion...........
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Old 07-25-2008, 02:57 PM   #13
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Perhaps my knowledgeable sources in the car industry are losing their marbles. I am not talking about the gap insurance that folks buy to make up the "gap" between the value they owe and the ACV in the event of collision damage.

A factory guy I know (reliable source) that most automaker's financial arms in effect reinsure their leased vehicles with a type of wholesale gap insurance against large vehicle losses. Of course, there are limits to this coverage, there is a cost to get it, and the reinsurer has the option to cancel a contract to offer it if market conditions sour.

i doubt he was lying to me, it seem plausible..........:confused:
Your source is correct that this is done. I bet that now that the insurers have gotten spanked that the policies will be a lot more expensive and harder to get.
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Old 07-25-2008, 02:58 PM   #14
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Your source is correct that this is done. I bet that now that the insurers have gotten spanked that the policies will be a lot more expensive and harder to get.
Or be limited to Honda, Toyota, and Nissan vehicles...........
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Old 07-25-2008, 02:59 PM   #15
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Perhaps my knowledgeable sources in the car industry are losing their marbles. I am not talking about the gap insurance that folks buy to make up the "gap" between the value they owe and the ACV in the event of collision damage.

A factory guy I know (reliable source) that most automaker's financial arms in effect reinsure their leased vehicles with a type of wholesale gap insurance against large vehicle losses. Of course, there are limits to this coverage, there is a cost to get it, and the reinsurer has the option to cancel a contract to offer it if market conditions sour.

i doubt he was lying to me, it seem plausible..........:confused:
If in fact there's an ins. co. that's willing to guarantee loses on Chrysler vehicles at auction, well, they must be crazy. Can you imagine a Chrysler going through an auction at a profit. Maybe Chrysler can get them to do the leasing. (heh)
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Old 07-25-2008, 02:59 PM   #16
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BTW, GE Capital exited the leasing business (new and used) quickly after a $230 million dollar loss in ONE QUARTER several years ago...........
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Old 07-25-2008, 03:00 PM   #17
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If in fact there's an ins. co. that's willing to guarantee loses on Chrysler vehicles at auction, well, they must be crazy. Can you imagine a Chrysler going through an auction at a profit. Maybe Chrysler can get them to do the leasing. (heh)
They look at the spread between perceived resale and such, and price the insurance policy accordingly. Seems risky to me, but I'll be the premiums are high enough for a decent ROI,at least on the "right" vehicles.........
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Old 07-25-2008, 03:03 PM   #18
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They are no doubt living on the edge.
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Old 07-25-2008, 03:04 PM   #19
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They are no doubt living on the edge.
Chrysler, the reinsurers, or both??
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Old 07-25-2008, 03:05 PM   #20
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I think Chrysler may have the edge here, but it's close.
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