AUBURN HILLS, Mich. -

As was reportedly coming, Chrysler Group and Santander Consumer USA joined forces Wednesday for an agreement to provide a full spectrum of auto financing services to Chrysler and Fiat customers and dealers under the name Chrysler Capital.

In a move that will end a three-year, post-bankruptcy association with Ally Financial, Chrysler Capital will be launched on May 1.

Chrysler Capital is designed to provide Chrysler, Jeep, Dodge, Ram Truck, SRT and Fiat customers with competitive retail purchase and lease financing. It also will provide wholesale financing and related services to Chrysler Group and Fiat dealers.

“We expect Chrysler Capital to help Chrysler Group continue its sales growth by offering consumers the most competitive and innovative retail purchase and lease financing available in the marketplace,” said Peter Grady, Chrysler’s vice president of network development and fleet.

“We found in Santander Consumer USA a nimble partner backed by the strength and experience of a worldwide banking leader. We have been impressed with Santander Consumer USA’s capabilities, energy and attitude about selling Chrysler Group vehicles,” Grady continued.

Santander Consumer USA, a financial services company based in Dallas, is majority owned by global banking player Banco Santander of Madrid, Spain. Banco Santander already has 40 agreements with more than 10 automakers around the world.

Under this 10-year, private-label agreement, Santander Consumer USA will establish a separate business unit dedicated to providing financial services under the Chrysler Capital name.

In addition to dealer new- and used-vehicle inventory, Chrysler Capital will provide financing for dealership construction, real estate, working capital and revolving lines of credit.

Under the agreement, Santander Consumer USA will provide Chrysler Group with a nonrefundable upfront payment and a quarterly share of revenues.

Barclays was the exclusive strategic and financial advisor to Chrysler Group in its evaluation of auto finance partners and in this agreement with Santander Consumer USA.

“Santander Consumer USA is pleased that Chrysler Group has selected us to assist its dealer network in providing customers with competitive financing solutions,” said Thomas Dundon, chief executive officer and president of Santander Consumer USA.

“Our top priority will be to provide best-in-class service to Chrysler’s dealer body and retail consumers,” Dundon continued. “We are confident that this relationship will result in the most innovative branded finance solution in the market. The goal is to leverage an improved information flow that shows us how, as a finance provider, we can work with Chrysler to improve our offers to dealers and customers, to capture incremental sales.”

As Chrysler and Santander prepare for the May 1 launch of Chrysler Capital, Grady said Chrysler and Fiat dealers will continue to do business as usual through Ally Financial and other financial institutions.

“Ally will continue to provide financial services to Chrysler Group and FIAT dealers and their customers at the very least through the end of Chrysler Group’s existing contract with Ally, which will expire on April 30,” Grady said.

“Ally has been a good business partner for Chrysler and has forged strong relationships with many of our dealers. Chrysler Group expects that Ally will continue to do a good job for our dealers and retail customers beyond the April 30 expiration of our current agreement,” he went on to say.

The Wall Street Journal reported last month that a deal between Chrysler and Santander was in the works. The newspaper posted a report sourcing unnamed individuals familiar with negotiations saying the two companies signed a term sheet on Jan. 14.

Last spring, Chrysler produced necessary announcements to satisfy the requirement in its agreement with Ally that stated notice of nonrenewal be provided at least 12 months prior to the date of expiration.

Santander Consumer USA, a lender that often caters to subprime borrowers, already has plenty of Chrysler paper in its portfolio.

The prospectus connected with a $1.25 billion offering of automobile receivables-backed securities Santander Consumer USA rolled out in January showed contracts involving Dodge vehicles constituted the highest percentages of receivables and outstanding principal balances within the deal.

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