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Chrysler to Scrap Leasing
Struggling automaker says it will focus more on financing loans
By Harry Kimball
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Posted Jul 26, 08 12:07 PM CDT
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(Newser)
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Chrysler will no longer offer auto leases through its financial arm, due to the declining value of used automobiles, particularly trucks and SUVs, the Detroit Free Press reports. Instead, it plans to focus on financing, which could lead to better deals for those who buy cars through loans. Given the present economic climate, “Chrysler is just trying to minimize risk,” one industry-watcher said.
“I'm blown away," said a surprised dealer. “I've got some that have leased for 30 years from me, just going from one deal to another." Others say banks will pick up the leasing slack, though probably at higher rates. Leases pose a risk for automakers, the Wall Street Journal notes, because they have to buy and own the cars. When the leases expire, the vehicles are sold at used-car auctions, but demand for them is declining.