Chrysler Offers No-Interest Loans on Autos
Chrysler Corp. escalated the car industry’s cut-rate auto-financing wars today by offering interest-free loans on its cars and trucks.
The zero-percent financing is the most drastic program yet offered by a U.S. auto maker in an attempt to spur sagging sales.
The interest-free loans are based on repayment schedules of up to 24 months and will be given for 1988 and 1989 U.S. car and truck models. Chrysler said the sales incentive program has no expiration date.
The company is also offering rates of 5.9% to 10.9% on longer-term loans, Chrysler said.
Last week, Ford Motor Co. launched the latest salvo in the incentive wars by offering 2.9% short-term loans and expanding its other incentives. General Motors Corp. matched that program on Friday.
Chrysler, which is also offering cash incentive programs ranging from $300 to $2,000 per vehicle, said it has increased the incentives offered on a number of car and truck models.
Bennett Bidwell, chairman of the Chrysler Motors Unit, said the auto maker does not plan to reduce its second-quarter production schedules and thinks that business will pick up due to the program.
Several weeks ago, Chrysler had announced a program featuring 4.9% loans that at the time was its most extensive program since the late 1970s.
Bidwell said that program was created because the company saw that sales were softening.
U.S. auto sales are down about 8% so far this year, and truck sales are off about 2%.
Chrysler acknowledged that the cost of the new round of incentive programs will have a slight negative impact on second-quarter results.