Lease a Commander For Under $200 Per Month
Date 2006/11/10 18:56:00 | Topic: Commander
|Detriot News is running an article that is causing some serious head-scratching. According to the article, current customer and dealer incentives have made it possible for some dealers to offer brand new Jeep Commander leases for less than $200/month:|
It's good news for car buyers who can lease a loaded Jeep Commander full-size SUV at some dealerships for less than $200 a month. But analysts say it could prove a risky strategy for Chrysler, particularly as 2007 models are arriving at dealerships.
To make payments attractive, automakers typically have to subsidize leases with precious marketing dollars. Moreover, Chrysler could take a hit on the back end when it sells vehicles coming off lease -- especially if it overestimated their residual, or resale, value when the lease was calculated.
"They basically want to use any tool to move inventory, but there's so much pressure on them to move the units that there's a tendency to want to raise the residual, which will lower the monthly payment," said Tom Libby of J.D. Power's Power Information Network, which tracks vehicle sales. "The long-term problem with that is you could then have a loss on the unit when it comes back."
Recently, Fortinberry was leasing a $32,000 Jeep Commander for 27 months for $179 a month. The deal required an initial payment of $1,995. Chrysler employees' monthly payments could be as low as $118.
The deal was possible because up to $8,000 in incentives applied toward the lease. Fortinberry quickly sold all his Commanders.
Likewise, at Mike Riehl's Roseville Chrysler-Jeep, a customer can lease a 2006 Commander for 27 months at a monthly payment of $169. That compares to $483 a month for five years with $1,877 down to buy the same SUV.
Check out the entire article.