Warnings that financial services businesses may be left to pick up part of the cost of a failed Chrysler
Publication:
Friday, 12 June, 2009 - 00:00
chiefofficersnet
Analysis in BankingInsuranceSecurities.Com shows that banks, finance companies, leasing companies and insurance companies are all exposed to unexpected risk as a result of the deal to save Chrysler.
The articles demonstrate that the deal allows Chrysler to be remade - and leave its liabilities behind.
Amongst those liabilities are those for warranty claims and latent defects.
Companies that provide hire purchase or leasing arrangements are, the articles argue, potentially liable in the case of latent defects.
That may lead to personal injury and related claims against finance companies that do not fix known faults on vehicles they provide.
For insurance companies, the articles argue, the risk is that they will have no one to claim indemnity against in the case of latent defects causing injury.
Recalls this year relate to potentially serious problems which may cause cars to stop suddenly with the attendant risk of accident.