Aug. 1 (Bloomberg) -- Leasing a car is about to get more expensive.

Chrysler LLC, the money-losing automaker owned by Cerberus Capital Management LP, is closing its unprofitable leasing business today, and General Motors Corp. and Ford Motor Co. are scrapping leases for some models.

``People who want a lease will have to pay much more attention,'' said Joe Spina, an analyst at Edmunds.com, a car- buying Web site in Santa Monica, California. ``They'll need to crunch numbers harder and make sure it still makes sense.''

While finding a finance company gets trickier, declining resale values mean payments for a typical lease on a new $43,000 Grand Cherokee Overland SUV may climb as much as $70 a month to $840 from a year ago, industry analysts estimate. About 20 percent of U.S. new-vehicle sales have been leases this year, according to data compiled by researchers at J.D. Power & Associates in Westlake Village, California.

Chrysler today announced new terms for purchases aimed at lowering monthly payments. They include 72-month loans on a wider range of vehicles, $2,000 cash back and an extra $750 for returning leasing customers who buy a vehicle.

``The economics of leasing have changed,'' said Chrysler Financial spokeswoman Amber Gowen. The company is focusing more on making buying cars more attractive and supporting customers who want to purchase rather than lease, Gowen said.

Price Increase

Ford told some U.S. dealers July 29 it would increase prices on leases for large pickup trucks. GM, whose GMAC finance unit is also losing money on leases, cut off incentives in Canada. New York-based JPMorgan Chase & Co., the biggest U.S. bank by market value, has stopped financing Chrysler leases and Wells Fargo & Co. of San Francisco won't underwrite any vehicle by any U.S. manufacturer.

Ford Motor Credit Co. spokeswoman Meredith Libby said leasing remained a part of the Dearborn, Michigan-based automaker's plans and would continue. Ford will revise projected resale values August 5 for the next quarter, and customers may see different monthly lease payments following that, Libby said.

Chrysler of Auburn Hills, Michigan, which was bought last year by New York-based Cerberus, announced a first-quarter net loss of about $515 million. Chrysler sales fell 22 percent this year through June, compared with the industrywide decline of 10 percent in the U.S.

With tightening credit and resale values falling dramatically, automakers can't afford to underwrite leases the way they have, said General Motors spokesman John McDonald. This will be an industrywide trend that will affect people for the foreseeable future, he said.

`Significant Shift'

``You're going to see a pretty significant shift of people who used to lease purchasing those vehicles and holding on to them for a long time,'' McDonald said.

Customers seeking more expensive vehicles will continue to want leases, said Mike Reilly, a salesman at Bay Bridge Chrysler Jeep Dodge in Oakland, California. The dealership works with five to 20 finance companies on leases at any one time, he said.

``It will not affect me a smidgen,'' Reilly said. ``A leasing candidate has to have a good credit rating. It's a great way for a bank to make money.''

Residual or resale values are dropping for SUVs and gas- guzzling light trucks, pickups and minivans.

For the Grand Cherokee Overland, Chrysler's most expensive four-wheel-drive SUV, the resale price for a 2008 model probably will fall to 30 percent of the original price tag after three years from 36 percent in 2007, said John Blair, chief executive officer of Automotive Lease Guide, a Santa Barbara, California- based company that estimates residual values for automakers.

Resale Pain

The automakers' pain on resale values gives leasing customers leverage to make deals when their agreements are up, said Jeff Ostroff, chief executive officer of Carbuyingtips.com in Ft. Lauderdale, Florida. If consumers can show the dealer that similar models are selling for much less than the residual value in the contract, they may be able to get a better deal on purchasing the car, he said.

Leasing isn't for everyone because of mileage limits, said Ostroff, who hears from visitors to his Web site who have $5,000 or $6,000 in mileage charges at the end of their terms. Most leases also prohibit keeping the vehicle in another state for more than 30 days, which can be a big problem for people who change jobs unexpectedly, he said.

Finance Charges

With a lease, you pay higher finance charges, but you get more car for your money. It may be a good deal for people who don't exceed mileage limits and are willing to forego ownership to get the latest features and technology, said Al Hearn, president of LeaseGuide.com, a consumer Web site based in Atlanta that isn't affiliated with the auto or finance industries.

Buyers can negotiate just as they do when they purchase, Hearn said. A lower price means lower payments as the lease is calculated from the purchase price, or ``capitalized cost.'' Sometimes dealers say the price isn't negotiable, but that isn't true. The biggest advantage is freeing up cash for more productive investing, Hearn said.

Getting out of your lease early can be costly. You are obligated for all the remaining payments, and the financing company may charge a penalty. Your credit rating may take a hit. An alternative is to find someone to take over your lease through Web sites such as Leasetrader.com or Swapalease.com.

Leasing is often hard to understand. Unlike loans, dealers aren't required to disclose how much of a monthly payment goes to finance costs, said Tony Giorgianni, associate finance editor at Consumer Reports magazine in Yonkers, New York.

``It's almost impossible for people to calculate how much they're paying to finance,'' Giorgianni said.

To contact the reporter on this story: Jeff Plungis in Washington jplungis@bloomberg.net.

Last Updated: August 1, 2008 15:31 EDT