GM, Ford offer zero per cent finance, incentives to bolster car sales

01 April 2009

In the wake of US administration's strict order to perform or cease to exist, carmakers Ford Motor Co and General Motors Corp are offering new incentive plans to push up sales and boost customer confidence.

Ford on Tuesday said it will offer zero per cent financing through its subsidiary and cover payments for up to 12 months on any new Ford, Lincoln or Mercury vehicle if customers lose their jobs. The offer will run through 1 June.

Immediately after, GM came out with a new plan that offers payment protection for the first 24 months of ownership. If a buyer loses his income, the company will make up to nine months' worth of payments for up to $500 a month. GM will also help protect the retail value of a new vehicle at trade-in time for a customer's next GM vehicle.

Chrysler and Hyundai have been offering zero per cent financing, along with rebates, employee pricing and discounts of up to $6,000 since January as it looked to clear out dealers' inventories and boost sales. However, the incentives appeared to provide little boost to sales.

The US administration has also come up with several incentives to woo customers. President Barack Obama in a television show said the warranty will now be safer than it's ever been, because starting today, the US government will stand behind your warranty. The administration is also exploring ways to provide tax credits or vouchers for people who trade in older gas guzzlers for new cars.

And the Internal Revenue Service on Monday began touting a tax break introduced last month that allows some car buyers to deduct from their income taxes the sales and excise taxes on purchases made by the end of the year.