Over the past few decades, Chrysler has taken on a host of owners and gone through one of the largest corporate bankruptcies in history. But with the automotive market back on its feet after being hit hard during the recession, some investors are ready to invest in Chrysler again, and this way of benefiting from Chrysler's recovery may surprise you.

Not the cars
Most automotive investors are aware that Fiat (NASDAQOTH:FIATY) is now the majority owner of Chrysler. So naturally, Fiat has a lot to gain from Chrysler's success. But Fiat also carries the risk of being directly exposed to Chrysler, increasing investment risk. Fiat shares are also not for income investors, since Fiat suspended its dividend.

In 1998, Daimler AG bought out then-publicly traded Chrysler and formed DaimlerChrysler AG with the goal of cost synergies between the two companies. But the combination didn't work out, and Daimler sold the vast majority of its stake to Cerberus Capital Management in 2006.

Most investors know the story from there. Cerberus took a total loss on Chrysler and limped away from the ordeal. However, Cerberus actually played the deal rather smart and is reported to have escaped with 90% of its investment.

How did Cerberus get out with such a small loss on such a mammoth bankruptcy? The answer didn't lie in the car-producing side of Chrysler; it lay in Chrysler Financial, the automotive financing arm. Cerberus managed to keep Chrysler Financial from completely collapsing and eventually sold it for $6.3 billion while keeping an additional $900 million in assets for itself.

Canadian buyer
It's no secret that Canada's banks did much better through the financial crisis than their American counterparts. Their position of pre-recession responsibility led to some investment opportunities during the downturn.

Chrysler Financial was bought by Toronto-Dominion Bank (NYSE:TD) (TSX:TD), as the bank sought to grab a piece of the U.S. automotive market, sensing a rebound in the future. For investors today, Toronto-Dominion offers an alternative to an investment in Fiat. It's also the only automotive financing arm of a bankruptcy-restructured U.S. automaker that's publicly traded. General Motors' (NYSE:GM) finance arm, once known as GMAC but since renamed Ally Financial, is still privately held, with the U.S. Treasury and Cerberus among the investors. When an IPO of Ally is run, it would be one of the purest plays on directly connected automotive finance, and investors interested in a pure play should watch for this IPO.

But an investment in Toronto-Dominion offers a number of advantages. While it has other factors influencing it beyond the automotive market, these factors allow Toronto-Dominion to pay a dividend of more than 3.5%. The bank's solid grounding in a more stable banking system also reduces the risk of a corporate collapse or severe share dilution.

Automotive bank
For investors interested in a play on Chrysler but not wanting to invest in Fiat, Toronto-Dominion Bank provides an alternative through the bank's acquisition of Chrysler Financial. Topped off with a stable history and a solid dividend, Toronto-Dominion is a blue-chip way to play an automaker with a financially troubled past. Before dismissing any investment in Chrysler as too risky, investors should see whether Toronto-Dominion Bank fits with their investment strategy.

Alexander MacLennan has no position in any stocks mentioned. This article is not an endorsement to buy or sell any security and does not constitute professional investment advice. Always do your own due diligence before buying or selling any security. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.