Chrysler Insurance will proceed with plans to launch dealer insurance products and retail products sold through dealerships following the sale of parent Chrysler Financial to Toronto-Dominion Bank.
Chrysler Insurance will become a stand-alone insurance company under the ownership of Cerberus Capital Management, Tom Gilman, Chrysler Financial CEO, said in a telephone interview.
In December, Cerberus agreed to sell Chrysler Financial to Toronto-Dominion for about $6.3 billion in cash.
The deal is scheduled to close by April.
Chrysler Insurance "will have opportunities to link that business to a dealer body that needs alternatives," Gilman said.
The products to be offered will include inventory insurance, as well as extended service contracts and guaranteed asset protection.
Even before the Toronto-Dominion deal, Chrysler Insurance had to relaunch itself.
As part of its Chapter 11 bankruptcy reorganization last year, Chrysler Group cut its captive finance company relationship with Chrysler Financial and steered its business to Ally Bank, the former GMAC.
That left Chrysler Insurance without a captive relationship with the Chrysler dealer body, too.
The business plan for Chrysler Insurance is to sign up third-party providers for many of the F&I products offered at dealerships, and then offer a full menu of F&I products to dealers, according to interviews last fall.
It's important for Chrysler Insurance to provide insurance for inventory financed by other lenders. Last year Chrysler Insurance complained that Ally wouldn't allow dealers with Ally floorplan loans to use Chrysler Insurance to insure their inventory. c