Leasing alternatives for Chrysler buyers

guest column by Jason Lancaster of AccurateAutoAdvice.com

When Chrysler Financial recently decided to halt their leasing program, Jeep, Dodge, and Chrysler dealerships around the country uttered a collective sigh. Bank One and other independent lenders followed Chrysler Financial and dropped their own Chrysler leasing programs as well. Dealers, already struggling, said that Chrysler’s decision to halt leasing was going to hurt sales. After all, if lease customers can’t actually lease a new Jeep, Dodge, or Chrysler, won’t they be forced to go and lease something else?

Not necessarily. The truth is that leasing was declining in popularity in recent years, and for good reason. The alternatives to leasing are getting better every year. So, if you were interested in leasing a new Chrysler product and now you can’t, here are some solid alternatives available.

First of all, there are a large number of people that consider leasing because it offers them a way to drive a vehicle that they could not otherwise afford. If you are in this group, I’ve got great news for you. There has NEVER been a better time to buy a late-model used vehicle. You can find a one- or two-year-old version of the new Dodge, Jeep, or Chrysler you want for substantially less than a new vehicle. Even better, most of these late-model used cars are now certified by Chrysler. Certified used vehicles offer many of the same benefits as new vehicles – like warranties and special financing – but they cost substantially less than a new vehicle.

If you’re interested in leasing a new Chrysler for tax purposes, I’ve got some more good news for you. [NOTE: I’m no tax professional – please consult your accountant about tax questions before purchasing a vehicle.] Commercial TRAC leases are regaining popularity with business users for quite a few reasons. Basically, a TRAC lease is a “lease” in name only. The terms of the agreement are simple – you make lease payments for a pre-determined amount of time, then you agree to buy the vehicle at the end of the term. Since the leasing company has no intention of ever taking your vehicle back, they don’t care how many miles you use or what condition the vehicle is in. It’s just like buying a vehicle because you can do whatever you want with it. The difference is you get to write your expenses off each and every tax year.

Finally, if you lease because you’re the type of person that likes to have a new vehicle every few years, I’ve got some bad news for you. You’re wasting a lot of your hard-earned cash. No judgment – I’ve done it myself – but it’s time to break your “new car every two or three years” habit. While I won’t bore anyone with tedious math calculations, take my word for it: The financially responsible way to buy a vehicle is to spend no more than half of your annual salary, finance that amount for as short a time as possible (if you finance at all), and then drive the car you bought until the wheels fall off. In the long run, you’ll save thousands of dollars following this advice. It’s not as fun as leasing a new car every few years, but you’ll thank me when it’s time to retire.

The speed (or sloth) of private equity

The Cerberus management of Chrysler has repeatedly lectured us on the speed of private equity versus the sloth of the corporation. That may be true if you’re comparing the current Chrysler LLC to the Daimler-led Chrysler Group, but let’s look at the 2009 models to see if it’s really true as an absolute.

Observers have made it clear that they think Chrysler interiors are subpar. The Dodge minivans, once the market leader, have been losing share to Toyota, Honda, and Chrysler since the redesign; all other vehicles are plummeting in sales. Jim Press smiles and says that’s okay because Chrysler is going to be a pioneer in moving from a large company to a small one. That’s all very well and good, but there’s a big difference between losing some sales to gain some profits, and slashing your sales in hopes of gaining some profits. It’s the difference between replacing the Spirit and Acclaim with the Cirrus and Stratus, and jettisoning Plymouth and the Neon.

What I wanted to see for the 2009s was not just a revised interior for the Compass/Patriot and a slashing of possible build combinations - though both were welcome. I also wanted to see someone addressing the sales of the Dodge Grand Caravan, which, like it or not, will be a major component of the company’s minivan sales for a long time - unless they drop it and keep just the Town & Country. Now, I want brand consistency as much as anyone else, but I remember all too clearly what happened when the Plymouth Neon and Plymouth Voyager were dropped: the sales went not to Dodge and Chrysler, but to other brands. Those customers were lost, and there is a core of Dodge Caravan buyers who will not go to the Chrysler Town & Country.

I also understand that the Chrysler brand is now essentially the Plymouth brand, with a different name and vague pretensions towards a high end exterior appearance.

Still, given that the Dodge has traditionally been the volume seller of the minivans, I’d have hoped that Chrysler would have done something to reverse its constant slide in sales, instead of encouraging it and hoping T&C sales rise enough to gain a #1 slot. Instead of that, we have ended up with individual model sales eclipsed by Honda and Toyota. I realize Jim Press professes not to care about sales, but this is still a big deal. Dodge and Plymouth used to hold the #1 and #2 minivan positions, not #3 and #4.

The old Chrysler Corporation would have acted instantly. Neon changes were made constantly, as needed, in the 1990s; they didn’t wait for a new generation. When buyers complained about the interior of the Cirrus, it was immediately changed. When problems arose, they were fixed quickly, in most cases - with a few exceptions, most notably the Neon head gaskets, which went until 1998 or so (probably because that’s how long it took for problems to appear).

The new Chrysler talks a good game, but the Caliber’s problems remain pretty much as they were. The Dodge Caravan remains woefully under-ornamented compared with the Town & Country and both are fairly spartan compared with the prior generation and the Toyota. The “identical suspension” game saved money but that should have been fixed, too. A Chrysler should be plusher than a Dodge, the Dodge should corner better. A Chrysler should start with luxury items standard.

Other models were largely untouched. I wanted to see Chrysler match GM’s XFE models; change the axle ratio, wheels, and tires, and see what kind of mileage you get. Play with the shift point programming. Do something to get the mileage up and the lead out. Even doing a Feather Duster type remake would have been worth its cost in publicity, because many people aren’t shopping for gas mileage, they’re shopping for perceptions of gas mileage — that is, they go to the dealerships of the company they think makes high-mileage cars. Chrysler is rarely on that list, and for good reason. GM is often not on the list, but with the XFE they’re trying hard to get there, and I think they’re largely succeeding. So is Ford. I doubt many dealers will disagree when I say that Chrysler is increasingly not even on the list of prospects, much less at the top.

I do not share a vision of Chrysler as a niche automaker, as Daimler seemed to see it; nor do I see it as a cute little automaker like Subaru, as Jim Press seems to see it. It’s hard to reconcile that with the knowledge that Chrysler Corporation once dominated auto technology and was a force to be reckoned with… and a perennial “must test drive” on most Americans’ shopping lists.

The 2009 models and the Hemi horsepower conundrum

As you may already know from reading the forums announcement, the news page, and the home page, we’ve updated our coverage of the 2009 models.

What you may not know is that we’ve just finally updated every individual Chrysler, Dodge, and Jeep model that had 2009 changes, so those are all in sync.

You may have noticed that the Hemi engine has wildly varying horsepower figures. There’s all sorts of speculation on why that may be. Here are some leading contenders:

• Chrysler PR people got a bunch of numbers mixed up. That’s supported by the Durango/Aspen press release which reports 356 and 365 horsepower - twice for both numbers.
• The engines are carefully tuned for the application, in some cases to get better gas mileage, in others to get more peak horsepower.
• The engines and their accessories can have different levels of efficiency and tuning, but the more horsepower they achieve, the more it costs. Therefore, power has been matched to the marketing and financial needs. The Ram, for example, had to be very close to Toyota’s 5.7 liter engines.
• The Hemi needs to breath well, and can’t do it in every vehicle. The Ram has a bigger underhood area and so gets the most power. The Challenger was designed around the layout of the engine and gets the second best power, etc. (Remember, we’re still just speculating.)
• The engine power is matched to the components and handling capabilities of the vehicle. Since it’s very heavy, the Ram can get more power without needing to upgrade numerous suspension parts, with various financial and gas-mileage costs; it also has a heavy duty axle for capacity reasons and doesn’t need an expensive axle upgrade to handle more power.
• Power ratings on the Ram were announced before gas mileage became an issue. Other applications of the new VCT Hemi were tuned for gas mileage, but the Ram number was “locked in.”
• In the case of the Ram 2500 and 3500, power is limited to increase durability.
• Chrysler is playing with our heads to see what kind of crazy theories we come up with. Really, the engines are all the same.
• After announcing the Ram 1500’s power rating, the engineers discovered that they could come up with a more satisfying, flatter torque curve by sacrificing some peak horsepower. Again, the Ram 1500 was locked in - they had already announced the number to the press.

You can speculate and guess along with us - the only people who really know are in the basement and executive towers of the Mall of the Pentastar, otherwise known as the Chrysler Technical Center.

Allpar posts 2008 Challenger SRT8 test drive

Thanks to Jim Choate for this one. From all we’ve heard, the Challenger is a real winner… especially now that it turns out the SE model (with the V6) has both decent acceleration and a good price.

Sorting it out

We know there is a replacement for the Grand Cherokee coming to the North Jefferson plant, based on Tom LaSorda’s statements. This should really be no surprise. It is planned to be lighter than the current model, also no surprise, given gas mileage issues and the reason why the current model is as heavy as it is (rumor has it the Mercedes people demanded changes based on their own needs). This vehicle will most likely end up being worked over and produced as a Mercedes, as the current one is.

Most likely some other vehicle will be built with it á la Nitro/Liberty. Prime candidates are the Aspen and/or the Commander. Maybe the Durango… it all depends how they want to play it. If the Grand Cherokee is the luxury version, a companion Dodge would make more sense than a companion Chrysler. On the other hand the Commander could be the true-luxury version, and the Grand Cherokee the sortakinda Oldsmobile version. They could also make a “lifestyle Dakota” from this.

Small cars… are a big open question. I suspect Chrysler has numerous paths under way and is trying to figure out which will work. There are two pacts in China, one with Chery and one with Great Wall, which might come to nothing or be the next small Chrysler, replacing the Horizon. There is the possibility of using the Fiat 500 chassis, and there is the thought that maybe engineers from Chrysler have been working on their own A-class car and that no matter who builds it, it is still coming from the plans that started to be drawn up last year or the year before. And then there’s the B-car, coming from the future Nissan Cube… and to confuse matters, the Nissan Versa spinoff to replace the Hyundai Atoz.

D-class (Sebring/Avenger) cars are coming, and I believe that they will be sourced from Chrysler, especially since they seem to be planning a whole series of vehicles at long last (the same plans were apparently made for numerous other projects). They’d want to keep control in-house if they were making sedans, coupes, hatchbacks, minivans, and crossovers all from the same source.

Hanging over all these future projects is the question of model cuts. It would not be insane to think that maybe the Durango and Aspen and Nitro will all be allowed to die. The Liberty may not even be needed, if the Grand Cherokee replacement can be built in two varieties - think Cherokee and Grand Cherokee. The old Jeep used to do things like that. I don’t know if the Liberty has a real following, but I doubt the Nitro does.

By the way, I’d appreciate it if your comments focused on what is likely to happen, not what you’d like to happen. You know my opinion, but here it is again:

Dodge - muscle cars (Challenger/Charger), Ram, Dakota, Caravan (sporty suspension tuning).
Chrysler - 300C, extended-wheelbase 300C (”New Yorker”), true-luxury T&C.
Plymouth - small crossover (”PT Cruiser”?), small cars, low-end, V6-only big car.

The 2009 Jeep Patriot is a step forward

The Jeep Patriot seems to have it all: gas mileage, offroad capabilities, reasonable pep, and a lifetime warranty, with numerous interior features. Sales have, though, been slower than one would expect during these frugal, gas-sipping days. The factory that makes the Patriot, Compass, and Caliber is still on limited capacity. Hopefully, customers will give the Patriot another look now that the Patriot’s gotten an interior workover; the “bulky look” is gone now, replaced by more curves and better-looking materials. We won’t be able to report on personal impressions for a while yet - we do have them! - but we can tell you just from the pictures that this is a much better interior than the current Patriot has. Pay particular attention to the treatment of the glove compartment; the blocky look is gone and textures seem to have been fixed, with chrome accents relieving the plastic. Overall, everything is still in roughly the same place - it’s clear that this was no “unlimited budget” or “from scratch” makeover - but the details have been cleverly reworked for a massive improvement.

You may wonder how we can release this photo (and more at our Jeep Patriot page). First, the details we have on the Patriot were leaked to us before we were bound by the media embargo; second, Chrysler has violated its own embargo with brochures and actual cars showing up at dealerships just a tad early. Is there really a point to our withholding photography when you can go to a Jeep dealer and see the real thing? We sure hope not, because we don’t want them to be mad at us again!