NEW YORK — Despite the upward creep of interest rates, people continue to buy cars in this reasonably robust economy, says William F. Jones, a Chrysler Financial vice president.
“I don't think Chrysler economists 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 to celebrate the fifth anniversary of the Hip-Hop Summit Action Network, which promotes financial literacy among the young people. Chrysler Financial is a co-sponsor.
Chrysler Financial is part of the $120 billion DaimlerChrysler Financial Services, the third-largest captive financial services company in the industry.
The company floor plans 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 his firm launched an innovative partnership with AIG last year to sell insurance to buyers of Chrysler brands 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,” Jones says.
Chrysler Financial has no plans at present to expand into other financial arenas. “We're going to stick to our knitting,” Jones says. But the company is seeking to streamline 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.
Chrysler Financial does sub-prime car loans “but we evaluate them very carefully,” he says. 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 against stepping outside those bounds.”
However, all applicants are treated equally. “It's our company policy to treat everyone on each person's credit worthiness,” he says.