Chrysler to resume leasing after 1-year break

DETROIT -- Chrysler Group is getting back into the leasing business in an effort to boost sales, but don't expect a return to the inexpensive lease deals of the past.

The automaker announced in a statement Wednesday that it will resume leasing for all 2010 Chrysler, Dodge and Jeep models starting Thursday, and it will offer some special deals on selected vehicles through Sept. 30.

Chrysler brand CEO Peter Fong said leases will give more options to consumers and will be competitive with the U.S. auto market.

But the market isn't as competitive as it once was. As recently as last summer, automakers were using cheap lease deals to clear dealer lots of unwanted cars and trucks. But now most automakers have cut factory production to match lower sales, and most have record low inventories.

"We are going to be competitive in the marketplace," said Chrysler spokeswoman Kathy Graham. "But it is today's marketplace we will be competitive in."

Chrysler got out of leasing in August of last year when the financial markets collapsed and values plunged for vehicles coming off leases.

In the past, automakers' finance arms leased vehicles, then bundled them and sold them as securities to investors. But the market for the securities dried up when the values of cars and trucks plummeted at the end of their lease periods last year.

Automakers and their finance arms lost millions when the values of sport-utility vehicles and trucks fell dramatically last summer when gas prices rose beyond $4 per gallon.

The new lease deals likely will give people lower payments than buying vehicles, however, and could make more people eligible to buy vehicles.

"There are customers in the marketplace that really don't want to buy a vehicle," Graham said.