Chrysler Financial’s Value Proposition

Chrysler Financial is on the sales block, and a handful of banks are in the running to buy it. ING Group and Toronto-Dominion Bank have been named in recent reports, as have Wells Fargo and PNC. I’ve heard Santander Consumer USA tagged as a potential suitor, too.

With Chrysler Financial no longer a captive for Chrysler dealers, what’s the value proposition for the company that buys it?

Cerberus Capital Management bought Chrysler and its associated captive for $7.4 billion in 2007. But things quickly went downhill; Chrysler filed for bankruptcy protection in 2009 and is now partnered with Fiat.

Chrysler Financial is essentially a standalone finance company. Sure, it has systems in place to service substantial loan and lease volume, but how many companies need that? With tens of billions of auto finance receivables, Wells Fargo and Santander certainly have those capabilities. Even TD Bank and PNC are among the nation’s top 40 auto financiers. Maybe the deal would make the most sense for ING.