GM Reportedly to Offer 2.9% Financing : Dealers Leak News of Sharp Cut in Auto Loan Rates for 1986 Models

General Motors, the nation’s biggest auto maker, today will slash interest rates on its 1986 cars to as low as 2.9% on 36-month loans, the Associated Press learned Wednesday.

“I don’t think GM has ever had rates this low,” said Betty Warner, financing manager of Kaiser Bros. Oldsmobile in Los Angeles. “I think these are the best rates ever.”

The low financing rates are to be good through Oct. 8, she said.

GM had intended to announce the low interest rates at a news conference today in Detroit, but word leaked out early as dealers who had been wired by GM about the new rates contacted newspapers to change their advertisements.

Several GM dealers in California confirmed that they had been notified of the lower rates.

Warner said her notice did not indicate whether the offer was good nationwide but said she thought it was.

Several GM spokesmen in Detroit declined to confirm the rates or the areas in which they would be effective.

In Lansing, Mich., John Fuller, sales manager of Shaheen Chevrolet, said he had not been formally notified of the new rates, but added, “I understand they will take effect on Thursday.”

GM’s target has been to have a 60-day inventory of unsold cars. But many of its models have inventories of more than 100 days, and some exceed 250 days.

Besides the 2.9% rate on 36-month financing, the new terms to be unveiled by GM include rates of 4.8% for 48-month financing and 9.9% for 60 months, Warner said. Fuller said he understood that the rates would be the same as those cited by Warner.

Currently, buyers are offered rates on selected models of 5.9% for 30 months, 6.9% for 36 months, 7.9% to 8.9% for 48 months and 8.9% to 9.9% for 60 months (depending on model).

They are offered through General Motors Acceptance Corp., GM’s wholly owned financing unit. It’s expected that dealers will pay part of the cost of the cut-rate loans, which could reduce the bargaining room buyers will have on a car’s price.

GM buyers also currently are offered a $750 cash rebate in lieu of the lower interest rates. That rebate offer is to expire Sept. 24. New-car loan rates at banks vary nationwide but are closer to 10% in most cases.

Most interest rates nationwide recently have fallen sharply on auto and other consumer loans and home mortgages, reflecting banks’ and other financial organizations’ lower cost of funds.

Last week, the Federal Reserve Board lowered a key interest, the discount rate, to 5.5% from 6%, its fourth half-percentage-point drop this year.

And earlier this week, banks nationwide lowered many of their lending and savings rates to reflect the changes.