Chrysler Goes 1 Up on GM, Offers 2.4% Financing Deal
One of General Motors Corp.’s competitors jumped on the latest incentive bandwagon today, cutting its rates to compete with the 2.9% financing on 1986 cars the nation’s largest auto maker is offering.
Chrysler Corp. today announced a 2.4% interest rate on most of its 1986 cars and light trucks and some of its 1987 cars.
The GM offer is on 36-month notes, while the Chrysler offer is on 24-month notes. (GM opts for 2.9% rate, Part IV, Page 1.)
Harold Sperlich, president of Chrysler Motors, the company’s auto making arm, said: “Chrysler’s here to compete. That’s what not raising prices on 1986 models is all about, and that’s what our new interest rate program is all about.”
The 2.4% rate apparently is the lowest ever in the industry, Chrysler said, and is available only through Chrysler Credit, the auto maker’s financing arm.
Offer Expires Oct. 12
The program begins immediately and will expire Oct. 12. Chrysler, the nation’s third-largest auto maker, also is offering 3.6% financing on 36-month notes, 4.8% on 48-month notes and 9.9% on 60-month notes. Also offered are rebates ranging from $400 to $1,500 for customers who want to obtain other financing.
Not included in the offer are the 1986 Plymouth Horizons and Dodge Omnis, offered as the America package, and the hot-selling mini-vans and Dakota pickup trucks.
Some 1987 models also will be included. They are the Plymouth Turismo, Dodge Charger and Diplomat and Chrysler New Yorker and Fifth Avenue.
GM said Thursday that it is offering 2.9% interest for 36-month loans on all its 1986 cars and most of its light trucks. Loans for 48 months from General Motors Acceptance Corp., GM’s finance arm, carry 4.8% interest rates.
Car buyers also may opt for rebates ranging from $300 to $1,500 instead of cut-rate interest. The program expires Oct. 8.
“Only the most naive consumer could believe that GMAC is really financing cars at 2.9%,” Joseph Perkowski, chairman of the Credit Union National Assn., said Thursday.
‘Just a . . . Gimmick’
“It’s clearly just a marketing gimmick,” Perkowski said from Madison, Wis. “The consumer is paying for it in the price of the car.”
Perkowski said he would ask the Federal Reserve Board’s Consumer Advisory Board to investigate the GM program.
Ford Motor Co. President Harold Poling said Thursday that word of GM’s new loan program “ruined my day.”
Poling, in Los Angeles for a dealer preview of 1987-model cars, said he was “surprised, needless to say. . . . 2.9% is a fairly low rate.”
Analysts said that although they had expected GM to introduce new incentives to cut into its dealers’ inventories of more than 1 million vehicles, they were surprised by how big the incentives were.
GM has seen its market share slip, many of its models have inventories of more than 100 days, compared to the desired 60-day stock.
