CHRYSLER CORP. Chairman Lee A. Iacocca practices what he preaches. He tells his customers: "If you can find a better car, buy it." Today, his company is doing just that.

Chrysler is buying excellent small station wagons from its Japanese partner, Mitsubishi Motors Corp., to sell in the United States under the Dodge Colt Vista nameplate.

There are many reasons for this. Chief among them is that Chrysler cannot build a comparable vehicle on American soil at production costs that make sense.

Chrysler could get out of the small-wagon market and leave it to Japan's Honda Motor Co. Ltd., Toyota Motor Corp. and Nissan Motor Co. Ltd., all of which are producing great little family haulers.

But getting out would mean giving up big bucks, and that's not Iacocca's style. He's in it for the money, folks.

Outstanding complaints: The interior styling of the test model was somewhat baffling.

Small station wagons are supposed to be economy machines. But Chrysler seemed to be going for the gravy on this one. The interior was overdone. It had power windows and locks, crushed velour seats and a representative sampling of "Detroit wood" -- that plastic woodgrain stuff used in many U.S.-market vehicles designed for the upwardly mobile.

Also, the spare tire in the test model was inside the wagon, attached next to the right-rear passenger window. Guest riders in the right- rear seat complained about sitting next to the tire.

Outstanding praise: Overall excellent execution of product development. The craftsmanship -- paint, seams, carpeting -- is superb. The Colt Vista has some neat touches: a pull-out storage tray under the right-front passenger seat; two up-front "glove-compartment" units; and cup holders located in all of the right and sensible places.

The wagon seats seven comfortably, as long as the two passengers in the rearmost seats are little people. The center and rear seats can be folded down one way to create a huge cargo space; and they can be flipped back in another direction to form a double bed. Real neat.

Acceleration, ride and handling: Excellent in all three categories. Scoot power comes from Mitsubishi's 2-liter, 4-cylinder gasoline engine. This engine has a bit more guts than the 1.5-liter and 1.8-liter jobs found in some competing models.

The transmission is a user-friendly, five- speed manual. The wagon comes with either front-wheel-drive only, or with the optional four-wheel-drive.

The test model was equipped with on- demand four-wheel-drive, operable at the touch of a button recessed in the gear-shift lever. This function worked fine during last weekend's rains.

Warning: Most four-wheel-drive station wagons and passenger cars are not meant to be used as off-road vehicles. They are designed to give extra traction on slippery, hard surfaces. If the owner's manual does not say "off-road," keep your four-wheeler on the streets. Failure to heed this warning could lead to embarrassment.

Head-turning-quotient: A truly pleasing exterior.

Sound system: Truly boring.

Mileage: About 25 miles per gallon, combined city-highway, mostly riding in four- wheel-drive with five-passenger load.

Price-as-tested: $12,046, including $1,938 in options and a $195 destination (shipping) charge.