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Dealers Spur Auto-Loan Program for Young People

The debut of the all-new Dodge Caliber subcompact comes with an all-new auto-financing program to help young buyers with sparse credit histories.

“First VIP” is an effort by Chrysler Financial to both move the metal and help young consumers establish credit.

The initiative originated with Chrysler Financial's dealer advisory committee, says Kelly Mankin, vice president of Chrysler brands marketing for DaimlerChrysler Financial Services Americas.

“We asked dealers what could be done to make the launch of the Caliber more successful,” he says. “The dealers told us we need a program like this to meet the needs of first-time buyers.”

Eligible for First VIP are Caliber shoppers who lack previous new-car credit and who recently graduated from high school, junior college or accredited college.

They need a minimum of two verifiable credit references and proof of income and permanent employment (six-months minimum) or a verifiable commitment for employment prior to graduation. Loan terms of up to 60 months are available.

“If they meet the criteria, we'll give them loan approval without a co-signer,” says Mankin. “Dealers told us that was a big thing, because often either the young person doesn't want a parent co-signing or the parent doesn't want to co-sign.”

He says Chrysler Financial's goal is to “target young buyers, but not at undue risks.”

A similar financing program will be used for the launches of two new entry-level Jeeps, the Compass and Patriot.

Mankin says it is hard at this point to gauge the success of First VIP because Caliber sales have been so strong out of the box. Moreover, many of the buyers have been older people so far.

“Young people are having trouble finding Calibers that the old people haven't grabbed up,” says Paul Taylor, chief economist for the National Automobile Dealers Assn.

Meanwhile, Mankin says his firm is trying to appeal to young people with user-friendly improvements to its Internet initiatives.

“We found our online credit application process was considered to be ominous by some,” he says. “People would click on, but at some point, click off. Either they found it intimidating or the questions too long.”

A shorter online loan application is in the works.

TAGS: Dealers F & I
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