Loan money in hand, Chrysler offers 0% financing
January 16, 2009 - 4:12 pm ET
DETROIT -- With $1.5 billion in federal loan money on the way, Chrysler LLC rolled out an array of financing options including 0 percent to lure customers back into dealerships.
Chrysler is offering 0 percent financing for up to 60 months on many 2009 and 2008 models effective tomorrow.
Company executives said the loan money should start flowing immediately and that further incentives could follow shortly.
"We can now buy credit and get customers in the 620 [credit score] range, which dramatically opens the footprint of customers who can buy from our dealers," said Jim Press, Chrysler co-president, in a conference call with reporters this afternoon.
Press said that Chrysler Financial has "virtually not been able to be active in retail credit in last 30 to 45 days at all."
Steven Landry, executive vice president for North American sales and service, said: "Dealers told us after December that not having Chrysler Financial cost us 20 to 25 percent sales. We could see a significant lift."
Press said the extra money does not mean that Chrysler will return to leasing, which was suspended suddenly last August.
Amber Gowen, Chrysler Financial spokesperson, said the loan is only for retail loans to customers.
Said Press: "This loan is securitized for the retail loans to customers buying cars. It has nothing to do with wholesale or capitalization of dealerships."
Vehicles included in the 0 percent programs include the Chrysler Town & Country minivan and 300 and 300C cars; Jeep Grand Cherokee, Commander and Wrangler SUVs; and Dodge Grand Caravan minivan, Ram 1500 pickup and heavy-duty trucks, and Charger, Magnum and Challenger cars.
Landry said Chrysler will launch advertising either Sunday or Monday "to let our customers know that things are alive and well at Chrysler, Jeep and Dodge."
The loan announcement came a day after Chrysler announced it was extending shutdowns at some of its factories by an extra week.
Based on its sales projections, Chrysler expects to use up the loan proceeds by March 31. That is the deadline for Congress to approve Chrysler's plan for viability under conditions of its $4 billion federal loan.