Alittle sumpin' I learned about the car biz, Chrysler, and leasing ........

[Stinky The Clown]

We spent the weekend with my cousin. He's a moderately big guy in the dealer side of the car biz. One of his dealerships sells Chrysler, Dodge, and Jeep stuff. And they're no longer leasing cars, as you may have heard.

Many years ago, I had a leased car. The only time I ever did a lease. A 94(?) Mazda Milennia for 24 months with no money down. Make the first payment and ride. Very nice car. The list/sticker was $21K. The residual on the lease was $19K. That made for a very cheap lease. At the end of the lease, the car was worth $16, tops. It was really a great car, but had lousy resale.

I offered the dealer $16 to buy it. "Nope. The residual is $19 and that's what you'd have to give for it."

"Okay. See ya! Buh-Bye."

They probably got $15 when they auctioned it. Why didn't they take my $19?

Insurance is why.

That's how they do those cheap leases. They have insurance to cover the losses.

At least they did.

Circling back to today, Chrysler is out of the lease biz cuz they can't get that insurance any more. They had put their entire R&D into bigass trucks. And they now have a fleet of VERY NICE bigass trucks ready to come out as 09s.

A big fleet.

And the gap insurers are not at all interested in paying for them any more. They don't see an end to crappy Chrysler sales since their whole fleet is of a type that burns gas with free abandon. And if you're not selling them, the only way to move metal is to lease it.

It also explains why no one is giving away Hummers for .... I dunno ...... $10K. Cuz they're insured when they get sold at auction. And at auction, they still do okay *enough* being sold to offshore buyers. Hummers are desirable, cheap, and popular in the Middle East. Because of this insurance.

The lease 'crisis' is expected to hit other car brands, too.

Meanwhile, Toyota is selling every Prius they can make. There's a backlog for them. And two year old used ones are selling for about their original sticker price. And in some cases, even more. And buyers who do that are just plain dumb. The car won't save nearly that much gas to make the cost pay off. You want a Prius but can't find one? Buy a high mileage conventionally powered car and have fun. It is a FAR better deal. No cachet ..... but far better.

[Jane Austin]

1. And I'd give my right arm for a mini-van that gets 35 miles a gallon.

I don't care if it's diesel, hybrid or what, but I need a mini-van, and I don't want to pollute any more than I have to nor be beholden to dictators who are sitting on oil.

[Stinky The Clown]

3. Broadly speaking ....... pollution and fuel economy go hand in hand ......

.... no doubt some stickler will call me on this generalization, but the basic fact is that a high MPG car pollutes less than a low MPG car. And about the same ratio as their comparison on MPG.

[sharesunited]

2. It's one example where the free market makes govt-run look like a genius.

Airlines would be another example.