In an effort to get its share of a booming marketplace that has ample credit availability and leasing incentives, Chrysler Canada Inc. is returning to leasing for the first time since 2008.
Manufacturers, which stopped leasing during the financial crisis when asset-backed commercial paper dissolved, are increasing incentives in the Canadian market, which, on the heels of its second-highest level ever last year, has declined for two consecutive months.
Leasing accounted for about 23% of Canadian vehicle sales in 2012, a jump from 6% in 2009 but below the 2007 peak in the high-40% range.
To make up for the lack of leasing and to keep monthly payments down, dealers have extended loan terms. Now, many manufacturers, especially of Japanese and South Korean brands, are offering six-year and seven-year interest-free loans, many without down payments, to rebound from bleak January and February sales.
Because Chrysler does not have its own captive to offer leases and loans as other Canadian automakers do, the company partnered with Westminster Savings Credit Union of New Westminster, B.C. The credit union has had a leasing arm since 1996.
Chrysler’s leasing incentives include $99 twice monthly payments on the Dodge Dart compact. Models can be leased for one to five years with the option for weekly, twice monthly, or monthly payments. After posting sales increases in the first two months of the year, Chrysler is the frontrunner in the Canadian sales race.
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