The heyday of inexpensive new-vehicle leases

is over, at least for now, according to a Jan. 26 story in the Wall Street Journal by Karen Lundegaarg and Sholnn Freeman.

Stung by big losses on many of the attractive deals they offered in the past, automakers, banks, and other big vehicle lenders are scaling back the easy lease money that helped drive the U.S. auto market to record sales during the past two years, according to Lundegaarg and Freeman.

Some lenders have entirely exited the auto-finance business, and those that remain are taking a more conservative approach.

The result: consumers are having to dig deeper into their pockets to lease a new vehicle, or

else trade down or even out of the new car market.

Industry observers are already predicting fewer car sales this year. Paul Taylor, chief

economist for the National Automobile Dealers Association (NADA), predicts new vehicle sales, including leases, will fall to 16.3 million units this year from 17.4 million in 2000 and 16.9 million in 1999. Taylor attributes a small part of the expected slowdown this year to the

leasing crunch, but he says the bulk of the downshift is due to slowing economic growth and volatility in the stock market.

What went wrong with leasing? Mainly, the automakers and other lenders overestimated residuals -- what the cars and trucks would be worth at the end of their leases. Those missed estimates on resale value -- in particular, wrong bets on the future prices of sport-utility vehicles -- have added up to hundreds of million of dollars in losses for financing companies. And it could get worse before it gets better, according to the Journal.