GM Ends 0% Loan Program

General Motors Corp. on Tuesday unveiled new sales incentives for its 2002 model year cars and trucks, eliminating the no-interest loans it began offering last fall and increasing cash rebates on several vehicles by $1,000.

GM’s new “1-2-3” program offers $1,000, $2,000 or $3,000 cash rebates or financing rates of 1.9%, 2.9% or 3.9% on 24-, 36- and 48-month loans toward the purchase of a new 2002 model year car or truck.

All Buick, Cadillac, Chevrolet, Oldsmobile, Pontiac and GMC cars and trucks are included in the program, which runs through July 1. GM’s Saturn, Saab, Hummer and all 2003 model year vehicles are excluded from the program.

GM, the world’s No. 1 auto maker, previously had offered cash rebates of $2,002 or financing rates of zero percent, 2.9% or 3.9% on most of its 2002 model year vehicles.

The move puts additional pressure on Ford Motor Co. and DaimlerChrysler’s Chrysler operations as they try to return to profitability this year.

“We have always been competitive and we intend to continue to do so,” Ford spokeswoman Susan Krusel said, when asked whether the No. 2 auto maker will match GM’s new incentives.

Ford’s current U.S. incentives, including interest-free financing and as much as $2,500 cash back, run through today.

Sales incentives on new cars and trucks have diminished since the levels they reached in the fourth quarter after the Sept. 11 terrorist attacks, but they remain historically high.

Under its “1-2-3” program, GM will offer $1,000 back on the Cadillac DeVille, Cadillac Escalade and Chevrolet Corvette, which had no cash incentives under its previous program.

Buyers will get $3,000 cash back on many other models, including the Pontiac Bonneville, Pontiac Sunfire, Chevrolet Cavalier and GM minivans.