<p>DETROIT – General Motors Corp. and Ford Motor Co. both intend to continue to offer consumers incentives and 0% financing deals similar to the ones they offered last year. Beginning March 1, GM began offering $1,500 cash rebates on some of its best-selling trucks and sports-utility vehicles. Instead of the cash, consumers can opt to take special financing rates starting at 0% for 36 months and up to 60 months. GM is keeping a $2,002 cash rebate it offered under a previous program, on most of its other models. As part of its new program, GM is also offering a new lease program that waives remaining payments for lease customers who cut existing leases short and buy or lease new GM cars or trucks. Ford Motor Co. intends to continue to offer cash rebates, as well as zero percent financing deals until April 8. Under the company’s previous incentive program, it offered rebates of up to $2,500 depending on the model of the vehicle. Ford has also announced a new lease incentive program for returning lease customers. From March 1 to April 8, the company is offering “lease loyalty bonuses” of $1,000 for cars and $1,500 for trucks and SUVs. Financing rates of 2.9 and 4.9 are available on 48 and 60-month contracts. CUNA Assistant General Counsel Jeffrey Bloch said the auto makers’ decision to renew their 0% dealer financing offers in 2002 “doesn’t surprise us because it made such a splash when first done last year, and it will probably continue to be reintroduced from time to time.” Bloch said that’s why it’s continued to press the Fed to review how 0% financing is treated under Reg Z. “We were very encouraged when Fed Governor Gramlich, in response to a letter from Dan Mica, told us the Fed will look at this issue as part of a comprehensive Truth-in-Lending review planned for mid-year. With full page ads and TV commercials again extolling 0% financing, it’s important for consumers to be aware of all the ramifications,” said Bloch. NAFCU Economist Jeff Taylor said credit unions should expect to deal with these types of offers at least through April or the first half of 2002. Car manufacturers are interested in moving inventory off dealers’ lots in anticipation of the 2003 models arriving, and they’re also interested in making a dent in the imported car market. “The car manufacturers are obviously willing to sacrifice some of their profits to get as much sold in the next several months as possible,” said Taylor. He reminded credit unions that while 0% financing deals may be “unscrupulous, they are not illegal.” NAFCU urges credit unions to continue to educate consumers about the fine print of the 0% financing offers. Taylor said NAFCU also plans to work with consumer financial associations that have “clout” with these types of issues. -</p> <p>[email protected]</p>

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