0% Financing for 72 Months as Chrysler Tries to Dump Cars

By Douglas A. McIntyre Published Sep 12, 8:25AM EDT

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Fiat Chrysler Automobiles N.V.’s (NYSE: FCAU) Chrysler division apparently has a problem. It offers 0% financing for 72 months (and as much as $1,500 cash back) for some of its 2015 models. It is inventory clearing time.

The offer covers some of Chrysler’s 200, 300 and Town & Country models. Although Fiat Chrysler tends to do well as a company, most of that success is due to Jeep sales and sales of its popular full-sized pick, the Ram. Chrysler brand sales fell 14% in August to 25,580. Only the 200 model did well during the month.

Chrysler is also plagued by two other factors. The first is that it has high days to turn, based on analysis by car research firm Edmunds. The Chrysler Group number was 78 days in August, against an industry average of 62. That means Chrysler cars stay on dealer lots longer than most brands, which is a dealer nightmare. Chrysler’s attractive financial deals help dealers as much as Fiat Chrysler.

Also, none of the Chrysler cars are “best sellers” based on industry measures. There are no Chrysler models among the 20 best-selling vehicles for August. The list is dominated by Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM) and Ford Motor Co. (NYSE: F) vehicles. So, Chrysler models have to compete against much more popular vehicles.

ALSO READ: The 10 Cars Most Likely to Be Dumped

Another problem Chrysler has is that many consumer research firms rate it poorly. In the J.D. Power 2015 U.S. Initial Quality Study, Chrysler ranked third from the bottom, well below the industry average. It did just as poorly in the ACSI Automobiles Report 2015. How much these studies affect buying patterns may be an open question, but the grades cannot help Chrysler’s image.

It is model changeover time. The 2016 cars are coming to dealers, if they are not already there. Inventory of 2015 models is an anchor. Time to sweep them off the lot. Chrysler has become very aggressive trying to do so.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.