I hope I’m posting this in the right section. I’m in talks to lease a 2018 Alfa Stelvio Ti Sport and I looked up the lease values on edmunds. The lease value the dealer provided me do not match Edmunds because Edmunds is using Chrysler Capital and the dealer is quoting me from Ally. Chrysler’s lease numbers are better than Ally’s
So my question is, do dealers only use one bank (in this case Ally) or can I ask them to check Chrysler Capital so I can get the better lease values? I don’t want to sound like I don’t know what I’m talking about lol
Also can I lose out on some incentives/rebates by going with the other bank?
FCA sometimes provides better incentives when using a bank other then Chrysler Capitol. Check the incentives for your zip code, If you see IDL cash that is for a bank other then Chrysler Capitol. You can ask them to run using Chrysler Capitol but you may lose some incentives.
Yes, dealers often have agency agreements with several different fund providers including their own finance captive. Beyond the captive, they are free to establish agency agreements with other fund providers (banks). Banks usually are required, by their residual insurance carriers, to use the Automotive Lease Guide (ALG) when setting residuals which tend to be very conservative (lower than what you might expect from the finance captive). Also, money factors from banks are often higher.
For each fund provider, it’s important to determine their…
acquisition fee
money factor
residual factor
Other things to consider is that the captives frequently offer incentives where banks usually don’t.
Thanks for the info. So if I understand this correctly, Ally is a bank and not a finance captive? If so, is there a reason why the dealer would quote me Ally over Chrysler Capital which I believe is part of FCA.
They usually have Chrysler capital, ally and us bank. a lot of times Chrysler capital will have better mf and rv but one of the other banks may be offering an IDL. therefore other banks such as ally and us bank may have better payment numbers even tho the rv and mf are worse than CC.
This is sort of true but you missed some key points.
Dealers are free to sign agreements with any lender they choose. The main ones in today’s market are the captive lender, US Bank, Ally Bank, and various credit unions. Also leasing in select markets are CAL Automotive, MUSA, Bank of the West and Bank of St Louis.
Most captives have a 95-99% market share on their own leases. Occasional volume goes to non-captives for these strong captives that buy the bulk of their business with high RVs, subvented rates and captive-only lease cash.
There are a couple captives that don’t have such a strong market share (Chrysler Capital) and others that don’t subvent their rates on select models (TFS and Honda Finance). These are the primary brands where the non-captive lenders fight for lease volume.
There are currently only 2 RV insurance providers in business (catastrophic only) but RVI owns most of the market. They don’t require the lender to use ALG RVs. RVI sets their own values (much lower than ALG on just about every model) and base their policy off those. In reality, they are structured to never pay a claim. Banks and captives primarily self insure/reserve for losses.
You can researche IDL incentives for FCA products to see how leasing works for those brands. I have written extensible about it in past posts. Other brands have retail cash incentives that non-captive lenders can use.
Thanks! That was very informative. I was thinking back to the 1980’s when residual insurers took a bath. Often, market value was well below the residual at lease end. So, insurers got conservative and, as a general rule, required banks to use the ALG. Apparently, that has changed.
Yeah, most RV insurers went out of business due to poor forecast models. Now, there is SO much more data available and that, when combined with the right brains, forecast accuracy is improved.
I’ve been looking into leasing a Dodge Challenger and was thinking of going with an SRT 392 to get the 0.00007 buy rate (or some marked up amount) and 62% RV for 36/10. I got my head turned around today when a dealer was telling me Ally had $8,500 IDL cash and a RV 1% higher than Chrysler. The problem is the lease sheet they sent me showed a 9.25% APR with Ally (they said Ally uses APRs, at least with them). I asked for a reasonable MF (or APR), figuring a 0.00200 would leave them profit and me a great lease payment. They’re claiming that their buy rate with Ally is 8.75% because there’s so much lease cash, but I find that hard to believe. The guys on Edmunds don’t have access to Ally rates. Is there a way to find out roughly, other than asking a few dealers for it? It doesn’t seem Dodge dealers want to share all the info…
The buy rate they gave you for Ally is correct. FCA spends 8500 in IDL or they spend the equivalent to buy CCap’s MF down and support the RV some above ALG’s baseline for cast. You get to a very similar payment either way.
What zip are you in? There may be a CU that also gets the IDL money and has a decent MF and RV to beat both Ally and CCap on payment.
That’s interesting and amazing at the same time to me! They throw a huge rebate at the lease, only to compensate by charging 9.25% (the equivalent of a 0.00385 MF). I think the guy told me I could pay off the lease after making 3 payments, which could work. Take the huge rebate, then flip it to a 6 year loan.
My zip code is 94522. Your help is much appreciated!
Looking at other threads here, it seems Ally uses an APR instead of a traditional MF. Seems like a non-issue. Does Ally have a buy rate of 8.75% (a MF equivalent of 0.00365) because they have to take the car back with a high residual? It’s basically double a non-subvented rate.
One advantage of going with Ally or any other lender that’s actually progressed to the 21st century is they allow lease transfers, unlike Chrysler Capital.
My dealer used Ally (Alfa Romeo) and the finance guy also said that Ally does a lot of the floorplan financing - numbers on a lease are numbers but ultimately, there are relationships outside of just the leasing that may affect.
Yes, FCA has a unique lease incentive structure called IDL for non-captive lessors. Tons of cash that is trim specific that you qualify for if you lease through Ally, US Bank, Credit Unions or anyone else other than Chrysler Capital.
