Dodge tests innovative 1-year lease on '14 Charger, Challenger

Dodge tests innovative 1-year lease on '14 Charger, Challenger

The 2014 Dodge Challenger
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DETROIT -- Automakers usually struggle to sell current-model vehicles once they have shown their replacements, say, at an auto show. Typically, they ladle profit-sapping incentives on an outgoing model.

But this week, Dodge will try something different after it reveals the refreshed 2015 Challenger and Charger at the New York auto show.

The deal, called the Dodge Double-Up, boils down to this:

Dodge will offer a one-year lease on a 2014 Charger or Challenger. In a year, the shopper can move into a three-year lease on a 2015 model of either vehicle for the same monthly payment and no more money down.

If a shopper buys the 2015 model instead of leasing it, he or she gets a $1,000 incentive.

The program will begin Thursday, April 17, and run through August, Dodge brand head Tim Kuniskis said.

Kuniskis, who is also head of fleet operations for Chrysler Group, has signed an agreement with Enterprise Holdings to take the 2014 Chargers and Challengers as they come in from the short-term leases. Enterprise operates the Enterprise, National and Alamo rental brands and buys more than 1 million new vehicles each year.

Kuniskis: “I want them to feel good."

The agreement with Enterprise keeps the off-lease 2014s from going to auction and driving down residuals of 2015 models, Kuniskis said. Residuals are the future off-lease value of vehicles.

Higher residuals allow Dodge to offer lower monthly lease payments. Kuniskis did not disclose the details of Enterprise's purchase agreement.

Through March, sales of the Charger this year were down 4 percent while Challenger sales were off 24 percent. The refreshed Challenger is due in the third quarter, and the refreshed Charger is due in the fourth.

Kuniskis said the Double-Up program demonstrates respect for Charger and Challenger owners, who tend to be passionate about their cars.

"The last thing I want to do is take these people for the next five or 10 months and make them upset," he said. "I want them to feel good about what Dodge is doing for them."

2014 Dodge Charger

Kuniskis was named head of Dodge in April 2013. He had been North American head of the Fiat brand. While running Fiat, Kuniskis developed an innovative program to promote the 500e electric minicar. The program, which is still in place, allows 500e customers to receive up to 12 days a year of free auto rentals from Enterprise for when they need, say, a larger vehicle.

Creative leasing
This is how the Dodge Double-Up deal works.

• A shopper can lease a 2014 Charger or Challenger for 1 year. Leases of 15,000 miles start at $329 a month with $2,999 due at signing.

• In a year, the shopper can lease a 2015 model of either car for 3 years/36,000 miles for the same monthly payment and no more money down.

• The 2015 model's sticker price must be within $1,500 of the 2014 model sticker for payment terms to carry over.

• The customer must take delivery of both vehicles from the same dealership.

• The lease terms depend on the shopper's credit. The lender is Chrysler Capital.

• A consumer who chooses to buy the 2015 model receives a $1,000 incentive.

You can reach Larry P. Vellequette at lvellequette@crain.com.


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