To boost a sluggish used-vehicle market, the Chrysler group is offering a money-back guarantee on many of the used cars and trucks it sells its dealers.
Under a program announced last week, Chrysler, Dodge and Jeep dealerships can return the used vehicles they buy from the factory if those vehicles do not sell in 60 days. The Chrysler group will refund the purchase price, minus 5 percent to cover depreciation, says Peter Grady, the company's director of remarketing.
The program, called Retail Return Guarantee, runs through August. It covers several 2005 and 2006 mid-sized used SUVs whose sales are slumping as gasoline prices rise: the Dodge Durango and the Jeep Grand Cherokee and Commander.
Also qualifying for buyback are the 2005 and 2006 Chrysler Pacifica sport wagon, Dodge Sebring sedan and convertible and Dodge Stratus sedan.
Dealers must buy the vehicles either from a company auction limited to Chrysler group stores or on the company's DC Direct Web site.
Most of the used vehicles in the program are retired from rental service, Grady says. Some have returned from corporate fleets, he adds.
Grady says the Chrysler group wants to give its dealers an incentive to buy more used vehicles, especially SUVs, and thus bolster wholesale prices.
The program also seeks to reduce the company's inventory of retired rental cars and trucks, Grady says. Such vehicles are coming back in slightly greater numbers than at the same time last year, he says.
"We wanted to strike at the volume of what we're selling and what the dealers will sell this summer," Grady told reporters last week.
Chrysler officials would not disclose the company's sales to rental companies. Automakers often use such sales to offset declining retail volume.
CNW Marketing Research reports that fleet sales accounted for 24.0 percent of the Chrysler group's total U.S. sales for January through May 2006, compared with 19.6 percent in the year-ago period. Those figures include sales to government agencies, CNW says.
The Chrysler group offered a similar money-back guarantee on used Durango SUVs bought at dealer auctions last summer in Atlanta and Indianapolis, Grady says. None of the 1,000 SUVs bought under the pilot program was returned, he adds.
Grady would not predict how many used vehicles the dealers will buy under the new program or how many the Chrysler group will have to buy back. But if the program succeeds, he says, the company may make it permanent.
Brian Campbell, general manager of Bruce Campbell Dodge in Redford Township, Mich., says he will use Retail Return Guarantee to build his used-vehicle inventory, including SUVs. He says he once stocked about 100 used Chrysler group vehicles but now keeps 60 to 70 on his lot.
Says Campbell: "It gives you peace of mind to carry more inventory."
You may e-mail Arlena Sawyers at [email protected]