Chrysler suspends new car leases

DETROIT, July 26 (UPI) -- Plummeting prices for used trucks and SUVs has led U.S. automaker Chrysler Corp. to suspend issuing leases for its new vehicles, auto industry analysts say.

Leased vehicles usually end up being put on the auction block by manufacturers after the lease period is over, but since demand for fuel-guzzling trucks and sport utility vehicles is at a historic low due to high gas prices, leasing has become problematic, the Detroit Free Press reported Saturday.

"We've really reached a point today in this environment where the advantages of leasing, the economic advantages, have really disappeared," Jim Press, a Chrysler president and vice chairman, told the Free Press. "From a standpoint of trying to continue to make leases available, we're taking resources that really should better be used for retail financing."

Chrysler's move to suspend leasing and instead concentrate more resources into financing new car sales came as a surprise to dealers, the newspaper said. They're worried the move will translate into less business for them because in the current tight credit climate. Only those with near-perfect records will be able to obtain financing for an outright purchase.