Back in May, reader Sarah wrote to us about her car.
I lease a Chrysler minivan, and am wondering if their bankruptcy will give them the ability to “devalue” my van at the end of the lease (July 2010). I already see 2009 versions of the same van going for nearly $10K less than what we leased it for, and I’m worried.
We checked with Jeff Bartlett of the Consumer Reports cars blog, who offered sage advice, as well as things that all Chrysler lessors should keep in mind.
This may be a case where leasing is advantageous. The lease contract is based upon the predicted residual value (remaining worth of vehicle). The finance institution carries the risk should the vehicle be worth less than predicted-quite the opposite from a traditional purchase.
So, yes, the resale value MAY go down. However, the consumer should not be at risk.
My only question would be on returning the vehicle. Is their dealer one of those scheduled to close in June? If so, they should read the contract and contact the lease originator to determine how the vehicle will be returned.
Should the consumer want to purchase the vehicle at the end of the lease, its value may be significantly less than predicted and they could likely negotiate a very favorable deal. After all, the last thing a Chrysler dealer wants now is more unsold cars on the lot.
So Chrysler’s bankruptcy may leave people leasing their vehicles in a better position than before in some way. Check where you will be returning the vehicle, and if you like it, consider purchasing it at the end of the lease, though injury and lemon law claims may be a concern in the future.