DETROIT Chrysler LLC has told dealers that the automaker s financial arm plans to get out of the auto leasing business before the end of the year.
One dealer who asked not to be identified said it would stop leasing as soon as Aug. 1. Another dealer said the change is because that the company has experienced losses on leased sport utility vehicles and pickup trucks because their residual values have dropped.
Leasing has been a popular method for auto workers especially to support their employers by purchasing a new vehicle more affordably every few years. Leasing is especially popular in southeast Michigan and northwest Ohio, one local auto dealer said.
Chrysler spokesman Stuart Schorr declined to comment on the issue but said Chrysler executives will hold a conference call today.
A person briefed on the announcement said the automaker s financial arm will stop leasing vehicles because of the bath Chrysler is taking on leased trucks and SUVs that are being turned in.
They re giving away rebates on the front end of a couple thousand dollars, and then they re taking a $4,000 or $5,000 hit on these vehicles when they re being turned in, the dealer said.
Dealers did not want to be identified because the company had not made an announcement.
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