NEW YORK – Despite the upward creep of interest rates, people continue to buy cars in this reasonably robust economy, says William F. Jones, aFinancial vice president.
“I don’t thinkeconomists have taken our forecasts down because of interest rates,” he says in an interview here. “We’re still in a period of low-interest rates.”
Jones was on hand at NASDAQ headquarters in Times Square to celebrate the fifth anniversary of the Hip-Hop Summit Action Network, which is working to promote financial literacy among young people, in addition to other things. Chrysler Financial is a co-sponsor of the group.
Chrysler Financial, based in Farmington, MI, is part of the $120 billion DaimlerChrysler Financial Services, the third-largest captive financial services company in the industry.
CF provides dealers with financing for about 75% of vehicles on the lots of 3,868 U.S. Chrysler, Jeep and Dodge dealers.
It currently has a loan portfolio of $63.7 billion and also provides insurance for dealer inventory. In addition, Jones says CF launched an innovative partnership with AIG last year to sell insurance to buyers of Chrysler Group vehicles through direct mail.
More than 20,000 retail insurance contracts have been sold so far. “We think there’s significant upside potential for this business, but we can’t put a number on it now,” Jones says. Chrysler auto insurance guarantees vehicle repairs will be made with genuine Mopar parts.
However, CF has no plans at present to expand into other financial arenas. “We’re going to stick to our knitting,” he says. But the company is seeking to streamline its operations by expanding electronic contracting.
“Today’s process takes a lot of paperwork, even though some leases can be (approved) in less than a minute,” Jones says.
The overall financial health of Chrysler dealers is good. “There’s a relatively small number of dealers who are foreclosed because they can’t make floor plan interest,” he says.
CF does do sub-prime car loans. “But we evaluate them very carefully,” he says. “We run a very efficient shop.”
The company stays away from some of the evils associated with this type of loan. “A predatory loan environment is not for us,” Jones says. “We have safeguards in place from stepping outside those bounds.”
However, all applicants are treated equally. “It’s our company policy to treat every one on each person’s creditworthiness,” he says.
Chrysler got involved in the Hip-Hop summit to help young people manage their finances. Some CF employee volunteers teach a 6-week program to high school students to help them attain financial literacy.
Hip-Hop is a global phenomenon and is trans-generational, Jones says.
To promote its financial education program, the Hip-Hop Summit Action Network publishes a book called “Get Your Money Right.” It’s available on the HSAN website. Jones says, to date, more than 20,000 downloads have been made.