Posted on: Saturday, August 24, 2002

GM to discontinue no-interest loans

Associated Press

DETROIT — General Motors Corp., the first of the Detroit automakers to offer zero-percent financing after the Sept. 11 attacks, may soon end it.

After Sept. 3, the company will offer 1.9 percent financing for 36- or 48-month loans, and 2.9 percent for 60-month loans on all 2002 cars and trucks, except Corvettes, The Detroit News reported yesterday, citing a GM source and dealers.

Cash rebates of $1,000 to $4,000 on most models would still be offered.

GM will announce its 2003 marketing program after Sept. 3, a company source told the News.

A GM spokeswoman said yesterday that the company wouldn't comment on the status of its incentives programs until after Labor Day.

Meanwhile, Ford Motor Co. has extended zero-percent financing on most 2002 models to the end of September, as has DaimlerChrysler AG.

Ford made the first move last week in the latest incentive game when it began offering cash rebates and low-rate financing on most 2003 models.

By pulling the zero-percent financing, GM hopes to bring consumers into the showroom sooner and make room for 2003 vehicles.

Customers will "react by fear" said Brian Tellier, the new-car sales manager at Jefferson Chevrolet in Detroit.

GM is the only Detroit automaker seeing higher sales in 2002. Light trucks drove a 1.7 percent rise in the first seven months of the year.

Sales at Ford and DaimlerChrysler's Chrysler Group were down 10 percent and 3.4 percent, respectively.