The automaker has an ongoing deal with subprime specialist Santander Consumer USA to finance loans for consumers with credit scores lower than 650. Those with scores at the top end of the range fall into the nonprime risk segment. A higher score means lower risk.
Allen Samuels Enterprises Inc. in Waco, Texas, has 10 locations in the state housing seven Chrysler-Dodge-Jeep-Ram franchises, four Chevrolet and two Hyundai franchises. The group saw its overall sales rise 32 percent in 2011, COO Mike Lowry says.
Three of the group's Chrysler-Dodge-Jeep-Ram dealerships with the poorest overall average credit scores — two in Houston and one in Port Arthur, Texas — experienced some of the greatest year-over-year sales increases, Lowry says.
"Easing of credit has probably increased sales by about 20 percent because those are people that, before, we just couldn't get done," he says. "And even with the better customers, you can get more [loan] carried and with less money down."
Last year, in an effort to capture more of the subprime market, Chrysler entered into an agreement with Chase Bank to provide additional financing opportunities for consumers with poorer credit.
"In today's auto lending environment, we are witnessing fierce competition -- not just for super prime retail paper but for the full credit spectrum," said Gerry Quinn, head of Chrysler's retail and wholesale financial services. … "With the SAAR increasing, banks are very hungry for more earning assets."
Steven Kinkade, a spokesman for Ally Financial, a preferred lender for both Chrysler Group and General Motors, said the lender has expanded its credit availability for consumer loans over the last several quarters. This, he says, "has allowed dealers to make financing available to more consumers and drive growth."