Chrysler Offers 0% Financing for 84 Months to Dump 200 Model

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Fiat Chrysler Automobiles Inc. (NYSE: FCAU) will discontinue the down-market Chrysler 200 series cars. And to help push inventory out the door it will end the car’s run with 0% APR financing for 84 months. Observers of the industry have frowned on loans that last that long, because their likelihood of default it greater than for traditional length loans.

The fate of the model was determined earlier this year. According to Automotive News:

FCA has been unsuccessful in persuading another manufacturer to build the Dart and 200 after the two cars go out of production this year.

Dart production will end in September so that its assembly plant in Belvidere, Ill., can be retooled to build the Jeep Cherokee. Production of the Chrysler 200 is scheduled to end in late December to allow FCA’s assembly plant in Sterling Heights, Mich., to be retooled for production of the body-on-frame 2018 Ram 1500…

In terms of the 84 month deal:

For well-qualified buyers. Not all buyers will qualify for the lowest rates. Must receive financing through Chrysler Capital. Example down payment is 10%. Monthly charge is per $1,000 financed – see table below. See dealer for details. Must take retail delivery by 10/31/2016.

In other words, your credit score is important.

Although it has not sold well, the 200 did get some good reviews. According to the San Jose Mercury News:

With a starting retail price of about $23,000, the 2016 Chrysler 200 combines value with the power and sporty sounds that Detroit is known for.

The sedan also has Silicon Valley tech. New features for 2016 let drivers automatically route phone calls to voicemail and suppress text messages. Drivers can program a custom message to explain why they don’t want to be disturbed.

They also can easily customize the car’s touchscreen by moving app icons to the main menu bar.

However, the Chrysler 200 has sold only 48,858 units for the first nine months of the year, down 65%.

Ultimately, whether 0% APR financing over 84 months is bad for the company’s image, or even causes default rates to tick up, Chrysler dealers don’t want a dead model on their lots.