Chrysler’s Bankruptcy Clouds Future for Chrysler Financial
While Chrysler LLC’s bankruptcy filing under Chapter 11 on Thursday provided a clearer picture of the troubled automaker’s way forward, it left the future of Chrysler Financial clouded.
While Chrysler LLC’s bankruptcy filing under Chapter 11 on Thursday provided a clearer picture of the troubled automaker’s way forward, it left the future of Chrysler Financial clouded.
In a letter sent out Thursday, the finance company informed dealers that Chrysler’s bankruptcy filing could jeopardize agreements with its lenders.
“As a separate entity, Chrysler Financial is not included in the CLLC filing,” read the letter. “However, it does present several operational challenges that Chrysler Financial must address in order to maintain our credit agreements with our lenders.”
Until new procedures and process with its lenders are implemented, Chrysler Financial immediately suspended all incremental wholesale funding, all dealer loan advances in electronic fund transfers (ELT), all cash management accounts (CMA) re-advances, all new Dealer Rent-a-Car (DRAC) program funding, and fleet wholesale and fleet lease contract funding.
Additionally, Chrysler Financial suspended participation in Chrysler LLC’s subvented annual percentage rate program. The letter also stated that going forward, credit approvals will only be applicable for standard rate contracts.
“We now require that a contract be fully discounted prior to funding,” the letter read. “These proceeds will be credited toward the wholesale floorplan obligation that may exist on that specific unit at the time of processing. You will have 30 days from the date of approval to fund these contracts.”
As for retail financing, dealers will still be able to offer retail financing to customers at standard rates through Chrysler Financial. Dealers will also still be able to process applications through RouteOne.
Dealers were also notified that Chrysler Financial’s point-of-sale systems – CF Connect, eContracting, AutoOrigination, and ACE – will remain available. The company’s Dealer Rewards and CF Achievement will also remain available to dealers, as well as its Rewards Visa Instant Credit Card.
The letter also offered a 30-question Q-and-A section, and directed dealers with questions about their franchise agreements to Chrysler LLC. It also directed dealers to Chrysler Financial’s CF Connect dealer portal for additional updates on the finance company’s progress to rectify agreements with its lenders.
“Chrysler Financial remains focused on our operations,” read the letter. “We will provide updates as events unfold and as new processes that affect our current products and services are established and implemented.”
More Auto Finance

Interest Rates Further Squeeze Auto Consumers
Last month’s hike and a potential second increase this month add to a growing list of inflation woes that could continue to dent overall car sales.
Read More →
Mind Your Process
Consistent steps taken in various aspects of the F&I office can make valuable differences over time, similar to an outline for a best-selling book.
Read More →
Top Five Credit Application Fraud Flags
Compliance audits regularly reveal bad habits that can lead to fraud charges and should have been stamped out decades ago.
Read More →
More Auto Loans for the Taking in August
Riskier categories were on the uptick for the month as lenders loosened access in several areas while balancing out the exposure in another, Cox Automotive reported.
Read More →
July Was Hot for Auto Borrowers
Credit proved readily available for many, but most loans left buyers in negative territory, Cox Automotive said.
Read More →
Dealer Lender Preferences Revealed
When lenders provide consistent, fast service, their overall satisfaction scores with dealers greatly improve, according to JD Power research.
Read More →
Auto Refi Savings Surge
Consumers with 84-month auto loan terms who refinanced saved the most on monthly payments, according to a new report by auto refinancing provider Caribou.
Read More →
Subaru Enters Lending Business
The automaker follows other brands in adding captive financing in the U.S., and says the move will strengthen its position here.
Read More →
Positive Equity Reaches Record High
Mainstream vehicle owners who bought a car seven years ago are likely to have positive equity when trading in for a new vehicle, according to second-quarter Edmunds data.
Read More →
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →