but i was just reading about 0% for 72 months...rooters
July 25 (Reuters) - Chrysler LLC will offer zero percent financing for up to 72 months on some of its key larger vehicles such as the Dodge Aspen and the Jeep Grand Cherokee and Commander, a dealer contacted by phone said on Friday.
the big 3 have too many dealers..It's like starbucks but the ticket item takes 6 years to drink...Average loan now in place is creeping up to 66 mos...84 mos is out there..
If someone had some cash, buying SUV's at the heavy discount on trade ins (slashing over 50% of value) and hoping for gas to get back to 3.00 would be money making opportunity..
If someone had some cash, buying SUV's at the heavy discount on trade ins (slashing over 50% of value) and hoping for gas to get back to 3.00 would be money making opportunity..
Chrysler LLC will offer zero percent financing for up to 72 months on some of its key larger vehicles such as the Dodge Aspen and the Jeep Grand Cherokee and Commander, a dealer contacted by phone said on Friday. Chrysler to offer zero percent financing for 72 months
| Reuters
They were doing pretty well 3 years ago. Imagine a dealer getting back 50 Durangos a month written at 55% residuals with no market for them. Like toxic mortgage waste.
"More credit drying up... Sounds deflationary to me"
Not so sure about deflationary, but reduction in velocity for sure. Economy on vallium. My sense is leases will get more expensive, less attractive and less will be written in the mix. Fewer lease outfits will get a little more pricing power.
Delinquencies on vehicle loans arranged by auto dealerships have reached at least an 18-year high, the American Bankers Association reports.
The delinquency rate for so-called indirect loans has dipped slightly from late last year, the association says. But that decrease was insignificant, said ABA chief economist James Chessen.
In the first three months of 2008, 3.09 percent of indirect auto loans were at least 30 days past due. That rate was down from 3.13 percent in the fourth quarter of 2007 the highest delinquency rate since the ABA started keeping track in 1990.
"One quarter doesn't make a trend," Chessen told ******** ****. "But I would have been really troubled if the rate went up again. We may have a period where the rate might bounce around at high levels."
Soaring fuel and food prices, along with declining home equity and fal-ling stock prices, squeezed consumers in the first quarter, Chessen said. That pressure grew "more intense" in the second quarter, he added.
Although Bush administration tax rebates boosted second-quarter personal income, Chessen said, food and energy prices contributed to higher inflation.
Until last year, the rate of delinquent indirect loans had not exceeded 3 percent during the ABA's period of study.
The highest previous rate was 2.87 percent in the second and third quarters of 1991.
The loan data cover a broad range of borrowers, from the worst to the best credit risks. Dealerships arrange about 90 percent of all vehicle loans, Chessen says.
Delinquencies on direct auto loans, which consumers get directly from lenders, rose slightly in the first quarter of 2008 but remained at normal levels, the ABA says.
In the first three months of this year, 1.92 percent of direct car loans were at least 30 days past due. That rate compares with 1.90 percent in the fourth quarter and 1.68 percent in the first quarter of 2007.
Too many dealers, too many lending arms, too many brands/models and that's just the automakers. Too many Starbucks, too many bank locations, too many mortgage lender/brokers still!
I haven't even bothered to consider the impact of dealership square footage overhang because I assumed it would still there as an unmarketable single use facility with deep pockets. Now I am worried about California because dealerships were one of the big prizes to land in the zoning for dollars Prop 13 environment. One of the Largest (most brands) conurbations in the world is in Thousand Oaks halfway between Countrywide and Amgen. Ouch. Probably the biggest (volume) is the Ontario Auto Mall. ground zero for the Inland Empire implosion.
The problem with leasing isn't confined to Chrysler. It's everywhere in the industry. For a long time, leasing has been a break-even or loss leader way to move cars off the lot. Instead of buying one car every six years, you lease two cars, one every three years. Double the sales.
But it's only been sustainable with strong resale markets (domestic and foreign) at the end of the lease terms. Those markets have collapsed, and the financing arms are getting stuck with massive and growing inventories of unmovable cars, especially SUVs.
Unleash those frozen specimens of pony/horse sperm and let the insemination begin.
I've heard that all the SUVs and pickups being traded in for Priuses are being shipped to the middle east and south asia where big and gas guzzling is still in fashion.
Hmm... if that keeps up, they'll expect people to be able to PAY for their cars, much like how people will eventually have to PAY for their houses (despite all bail-out efforts since SOMEBODY is paying for the house, be it the owner or the tax-payer!)
I don't think Amerika can handle a world where people have to pay off their debts with real income!
I just called over to my chrysler dealer . I was having my truck inspected. Some asian guy answered speaking chinese. Is this some kind of joke or something? I need my truck for this weekend. WTF...maybe just a coincidence.
I have clients in both those malls, Rusnak BMW store being built is going to be nice, damn expensive and now even more so..They also just picked up Westoaks dodge, chrysler..Actually a pretty strong store for Chrysler..
That Sprinter is what I would promote the hell out of, convert to a rv and or use for car pooling..
Ontario customers are hurting for sure......The funny thing is riverside area over prior 4 years sold more SUV's then other ares thruout s.calif...
All those ballers in their big engined Chrysler 300/Charger/Ram leases coming back early to dealers. Cerebus is going to take it in the shorts big time. Who is gonna buy them used when they are discounting new so much and offering 0% financing.
IMO, new and used cars will be bought in showrooms or over the internet. If cars don't sell you can't pay the rent. Since we are certainly in contracting environment dealerships may be a thing of the past.
For those who want to test drive fewer outlets for delivery and repair will be all that is necessary. Probably banks will handle leasing and financing.
Just yesterday in the mail I got an unsolicited "preapproved" offer of $30,000 to spend on a Chrysler, no down payment and no docs required. Seemed like an insult, as I'm sure their best models are over that limit. It was steering me to only one dealer so maybe it was a local thing. Since all their models are junk, I declined.
It's been about ten years since I worked for a "major midwestern lender" that had a portfolio full of auto leases. Even though I was in a separate division, the crash in residual values wiped out the bank's net income and hence everybody's bonuses (plural is boni?).
Those who cannot learn from history are doomed to repeat it. What a country.
i have no idea how any of the "luxury" car makers could sustain any sales with the lease option. if i had to spend north of 50k on my car in a cash/loan deal (and i love my bmw) i would opt to get a cheap car and be done with it. it just isn't worth the money or cost of the money to plunk it all down on a car. So I would expect to see the 25k and up segment get decimated if leasing weren't an option given current income stats.
Perhaps the lightbulb is going off in enough heads? It says "Why bother?"
As in, why bother with a Chrysler. Why even bother with a new car?
I realized reading this thread that no one I know has bought a new car in the last year. Kind of amazing. Well one person did when their American minivan (Chrysler Town & Country) went on its 3rd transmission in 4 years.
it come down to the time value of money. let's see...do i want to drop 50 big ones on a car that's worth 20k after three years? Or do I want to lease it and have the cashflow to work and, perhaps, make it come out even if I'm good at all at that?
Watch. The next segment to be hit big time is the "aspriational" segment. Even people with real money cut back in recessionary times because it is unseemly to be a spender when others are cutting back. And the brands that reached out to the ones fueling consumption with credit are going to find themselves pretty short of customers and growth. Brands to watch: Tiffany (really a prole favorite), Burberry, Louis Vuitton (who the hell spends on bags unless you are flying private jets all the time?), Audi, BMW, Lexus (no growth and shrinkage of customer base), Hummer (no comment), Rolex (vulgar defined) and "designer" labels that advertise. Real luxury goods providers (like Loro Piana, Isaia and the ones you've never heard of) will be fine as they didn't try to reach down.
I just got a $50,000 pre approved from Ford. As if...?
I am going to buy an Element from Honda in 09, pimp it good and be done with it for a long while.
I bought a Chrysler Pacifica two years ago for $23000. It is a good station wagon, handles very well and gets about 21 mpg. Fit and finish are not Lexus class, but who cares? It was the Daimler-Chrysler car that had Mercedes and Chrysler engineering input before Dr. Z pulled the plug.
The same car with goodies was on the lot for upwards of 33000. If you focused on a stripped car and threatened to walk away, you could get a deal back then.
History: Chrysler did not have a design staff until 1950. Until then, the cars were designed and built by their engineers. Then along cam Virgil Exner and the tail fins.
No design staff until 1950? Thats interesting. My father and grandfather always bought Plymouth, they always said they were the best car made (but, of course, this was MANY years ago).
GM just sent me two nice glossy flyers for Chevrolet and Pontiac, offering me an additional $250 on top of any rebates in place and my GM card earnings.
Felt kinda sorry for them, in a way... printing and mailing thousands of pieces of color cardstock is not as cheap as you might think! But my Y2000 Olds is still running fine. Not gonna trade for a few more years, as this recession bites in. I'm sure a lot of people with older cars are doing the same...
"I realized reading this thread that no one I know has bought a new car in the last year."
I know one. A young women I work with traded a VW for a Jeep SUV with a monster 3.8L motor. Got a GREAT price and she has that $2.99 gas deal. I'm guessing she will help put Chrysler out of business.
Besides the $2.99 gas, you have the lifetime drivetrain warranty. No word on whether they meant the car's lifetime or Chrylsers..
I also hear Jeep cancelled their Camp Jeep (owner love fest) at the last moment. People got burned on vacation planning, reservations etc.
Things must be bad when they start pissing off their most die hard supporters that saved their bacon when Lee was at bat 20 years ago. Negative branding. What a great idea NOT!
First and last?
Chrysler is doomed...Chery to the rescue??
I think that dog is down to one head.
I hope Crysler has money to pay for their 2.99/gl gas promotion.
but i was just reading about 0% for 72 months...rooters
July 25 (Reuters) - Chrysler LLC will offer zero percent financing for up to 72 months on some of its key larger vehicles such as the Dodge Aspen and the Jeep Grand Cherokee and Commander, a dealer contacted by phone said on Friday.
Also
"GE Restructures Into Four Business Segments From Six"
I wonder if any GE employees will be "restructured" to watching daytime TV.
the big 3 have too many dealers..It's like starbucks but the ticket item takes 6 years to drink...Average loan now in place is creeping up to 66 mos...84 mos is out there..
If someone had some cash, buying SUV's at the heavy discount on trade ins (slashing over 50% of value) and hoping for gas to get back to 3.00 would be money making opportunity..
mark up 20% and you have a great net gross...
More credit drying up... Sounds deflationary to me.
In 2006 Chrysler made 27% of sales through leases. So, very good news - for Ford and GM.
I wonder if this had anything to do with it
GMAC, Cerberus Accord With FDIC Provides $3 Billion (Update2) - Bloomberg.com
"zero percent financing for up to 72 months"
Following Ford's lead - although Ford will also pay you $5000 to drive a truck off their inventory.
If someone had some cash, buying SUV's at the heavy discount on trade ins (slashing over 50% of value) and hoping for gas to get back to 3.00 would be money making opportunity..
what kind of nonsense is this...
ok, i get it...
0% /72 is a BUY, not a lease...
i'm awake now.
Pundit,
obviously not your kind....but thats why your a pundit!
Maybe they should make a car that doesn't use gas? Maybe it's tooo hard and maybe it's easier to give up and go into BK?
Prediction - trucks and SUVs will be even cheaper.
What about going to 100 month leases and then back that shit with 50 year mortgages and just socialize America?
Maybe they should make a car that doesn't use gas?
I want one that runs on WATER! Oh wait, that's boat,...never mind.
I want one that runs on WATER!
it's called a Pony...
a grass eatin, water drinkin, poop machine
Ah, it makes sense however.
The conventional finance is not affected by depreciation. But the lease business is.
They just went from a "normal" deprecation model to a "falling like a stone" depreciation model, so the leases wouldn't be attractive anyway.
cnbc just said chysler just shut down their CMA (cash mgt account that dealers use to park cash) for upgrades.
Chrysler LLC will offer zero percent financing for up to 72 months on some of its key larger vehicles such as the Dodge Aspen and the Jeep Grand Cherokee and Commander, a dealer contacted by phone said on Friday.
Chrysler to offer zero percent financing for 72 months
| Reuters
These guys are Cornholiod.
Residuals on their leases must be huge money losers.
They need a new type of hybrid... regular engine plus a "Flintstone" option... or maybe pedals.
Seriously though, it doesn't make much sense. What is Chysler Finance's business going to be now? Just to lose money on residuals?
I'm sure banks and other lenders will be happy to step in and offer leases to dealer customers.
If they would sell $15,000 new cars they wouldn't have to worry so much about their lease residuals.
They were doing pretty well 3 years ago. Imagine a dealer getting back 50 Durangos a month written at 55% residuals with no market for them. Like toxic mortgage waste.
US distressed bonds at highest level since 2003-S&P
UPDATE 2-US distressed bonds at highest level since 2003-S&P
| Reuters
Chrysler has some great people working their but they are handcuffed by management who are clueless. Same old song and dance...
just call me Mr. Stimulus
GMAC & Chrysler. Can Stephen Feinberg pickem or what? Can he stand in line at the discount window?
"More credit drying up... Sounds deflationary to me"
Not so sure about deflationary, but reduction in velocity for sure. Economy on vallium. My sense is leases will get more expensive, less attractive and less will be written in the mix. Fewer lease outfits will get a little more pricing power.
Sheila has benwa balls.
just to adding some fire to gasoline
Delinquencies on vehicle loans arranged by auto dealerships have reached at least an 18-year high, the American Bankers Association reports.
The delinquency rate for so-called indirect loans has dipped slightly from late last year, the association says. But that decrease was insignificant, said ABA chief economist James Chessen.
In the first three months of 2008, 3.09 percent of indirect auto loans were at least 30 days past due. That rate was down from 3.13 percent in the fourth quarter of 2007 the highest delinquency rate since the ABA started keeping track in 1990.
"One quarter doesn't make a trend," Chessen told ******** ****. "But I would have been really troubled if the rate went up again. We may have a period where the rate might bounce around at high levels."
Soaring fuel and food prices, along with declining home equity and fal-ling stock prices, squeezed consumers in the first quarter, Chessen said. That pressure grew "more intense" in the second quarter, he added.
Although Bush administration tax rebates boosted second-quarter personal income, Chessen said, food and energy prices contributed to higher inflation.
Until last year, the rate of delinquent indirect loans had not exceeded 3 percent during the ABA's period of study.
The highest previous rate was 2.87 percent in the second and third quarters of 1991.
The loan data cover a broad range of borrowers, from the worst to the best credit risks. Dealerships arrange about 90 percent of all vehicle loans, Chessen says.
Delinquencies on direct auto loans, which consumers get directly from lenders, rose slightly in the first quarter of 2008 but remained at normal levels, the ABA says.
In the first three months of this year, 1.92 percent of direct car loans were at least 30 days past due. That rate compares with 1.90 percent in the fourth quarter and 1.68 percent in the first quarter of 2007.
cerberus - Magicians, able to make money vanish
Too many dealers, too many lending arms, too many brands/models and that's just the automakers. Too many Starbucks, too many bank locations, too many mortgage lender/brokers still!
I haven't even bothered to consider the impact of dealership square footage overhang because I assumed it would still there as an unmarketable single use facility with deep pockets. Now I am worried about California because dealerships were one of the big prizes to land in the zoning for dollars Prop 13 environment. One of the Largest (most brands) conurbations in the world is in Thousand Oaks halfway between Countrywide and Amgen. Ouch. Probably the biggest (volume) is the Ontario Auto Mall. ground zero for the Inland Empire implosion.
Dealerships matter locally.
The problem with leasing isn't confined to Chrysler. It's everywhere in the industry. For a long time, leasing has been a break-even or loss leader way to move cars off the lot. Instead of buying one car every six years, you lease two cars, one every three years. Double the sales.
But it's only been sustainable with strong resale markets (domestic and foreign) at the end of the lease terms. Those markets have collapsed, and the financing arms are getting stuck with massive and growing inventories of unmovable cars, especially SUVs.
A new kind of hybrid! (see photo)
Unleash those frozen specimens of pony/horse sperm and let the insemination begin.
I've heard that all the SUVs and pickups being traded in for Priuses are being shipped to the middle east and south asia where big and gas guzzling is still in fashion.
Jim,
Or mexico...They carry more people, especially under the floorboards and in the side panels...
Hmm... if that keeps up, they'll expect people to be able to PAY for their cars, much like how people will eventually have to PAY for their houses (despite all bail-out efforts since SOMEBODY is paying for the house, be it the owner or the tax-payer!)
I don't think Amerika can handle a world where people have to pay off their debts with real income!
Oh noes! I won't be able to lease a Chysler?! WTF?!
Unless you are over 65 or a buyer for Hertz, it's doubtful you'd even notice.
I just called over to my chrysler dealer . I was having my truck inspected. Some asian guy answered speaking chinese. Is this some kind of joke or something? I need my truck for this weekend. WTF...maybe just a coincidence.
Rob,
I have clients in both those malls, Rusnak BMW store being built is going to be nice, damn expensive and now even more so..They also just picked up Westoaks dodge, chrysler..Actually a pretty strong store for Chrysler..
That Sprinter is what I would promote the hell out of, convert to a rv and or use for car pooling..
Ontario customers are hurting for sure......The funny thing is riverside area over prior 4 years sold more SUV's then other ares thruout s.calif...
All those ballers in their big engined Chrysler 300/Charger/Ram leases coming back early to dealers. Cerebus is going to take it in the shorts big time. Who is gonna buy them used when they are discounting new so much and offering 0% financing.
IMO, new and used cars will be bought in showrooms or over the internet. If cars don't sell you can't pay the rent. Since we are certainly in contracting environment dealerships may be a thing of the past.
For those who want to test drive fewer outlets for delivery and repair will be all that is necessary. Probably banks will handle leasing and financing.
Just yesterday in the mail I got an unsolicited "preapproved" offer of $30,000 to spend on a Chrysler, no down payment and no docs required. Seemed like an insult, as I'm sure their best models are over that limit. It was steering me to only one dealer so maybe it was a local thing. Since all their models are junk, I declined.
It's been about ten years since I worked for a "major midwestern lender" that had a portfolio full of auto leases. Even though I was in a separate division, the crash in residual values wiped out the bank's net income and hence everybody's bonuses (plural is boni?).
Those who cannot learn from history are doomed to repeat it. What a country.
i have no idea how any of the "luxury" car makers could sustain any sales with the lease option. if i had to spend north of 50k on my car in a cash/loan deal (and i love my bmw) i would opt to get a cheap car and be done with it. it just isn't worth the money or cost of the money to plunk it all down on a car. So I would expect to see the 25k and up segment get decimated if leasing weren't an option given current income stats.
Perhaps the lightbulb is going off in enough heads? It says "Why bother?"
As in, why bother with a Chrysler. Why even bother with a new car?
I realized reading this thread that no one I know has bought a new car in the last year. Kind of amazing. Well one person did when their American minivan (Chrysler Town & Country) went on its 3rd transmission in 4 years.
That Sprinter is what I would promote the hell out of, convert to a rv
yup, that's my dream, at least until I saw the unicat. Having lived in Japan for 8 years I think I can handle that small a space.
Ipodius,
This is so true in SoCal. Nothin but BMW, MBZ and even Audis. Would be interested to see the purchase vs. lease rates.
it come down to the time value of money. let's see...do i want to drop 50 big ones on a car that's worth 20k after three years? Or do I want to lease it and have the cashflow to work and, perhaps, make it come out even if I'm good at all at that?
Watch. The next segment to be hit big time is the "aspriational" segment. Even people with real money cut back in recessionary times because it is unseemly to be a spender when others are cutting back. And the brands that reached out to the ones fueling consumption with credit are going to find themselves pretty short of customers and growth. Brands to watch: Tiffany (really a prole favorite), Burberry, Louis Vuitton (who the hell spends on bags unless you are flying private jets all the time?), Audi, BMW, Lexus (no growth and shrinkage of customer base), Hummer (no comment), Rolex (vulgar defined) and "designer" labels that advertise. Real luxury goods providers (like Loro Piana, Isaia and the ones you've never heard of) will be fine as they didn't try to reach down.
I think that dog is down to one head.
LOL!
I just got a $50,000 pre approved from Ford. As if...?
I am going to buy an Element from Honda in 09, pimp it good and be done with it for a long while.
An alternate take:
I bought a Chrysler Pacifica two years ago for $23000. It is a good station wagon, handles very well and gets about 21 mpg. Fit and finish are not Lexus class, but who cares? It was the Daimler-Chrysler car that had Mercedes and Chrysler engineering input before Dr. Z pulled the plug.
The same car with goodies was on the lot for upwards of 33000. If you focused on a stripped car and threatened to walk away, you could get a deal back then.
History: Chrysler did not have a design staff until 1950. Until then, the cars were designed and built by their engineers. Then along cam Virgil Exner and the tail fins.
No design staff until 1950? Thats interesting. My father and grandfather always bought Plymouth, they always said they were the best car made (but, of course, this was MANY years ago).
GM just sent me two nice glossy flyers for Chevrolet and Pontiac, offering me an additional $250 on top of any rebates in place and my GM card earnings.
Felt kinda sorry for them, in a way... printing and mailing thousands of pieces of color cardstock is not as cheap as you might think! But my Y2000 Olds is still running fine. Not gonna trade for a few more years, as this recession bites in. I'm sure a lot of people with older cars are doing the same...
"I realized reading this thread that no one I know has bought a new car in the last year."
I know one. A young women I work with traded a VW for a Jeep SUV with a monster 3.8L motor. Got a GREAT price and she has that $2.99 gas deal. I'm guessing she will help put Chrysler out of business.
Besides the $2.99 gas, you have the lifetime drivetrain warranty. No word on whether they meant the car's lifetime or Chrylsers..
I also hear Jeep cancelled their Camp Jeep (owner love fest) at the last moment. People got burned on vacation planning, reservations etc.
Things must be bad when they start pissing off their most die hard supporters that saved their bacon when Lee was at bat 20 years ago. Negative branding. What a great idea NOT!