WINSTON-SALEM, N.C. -- How can credit unions compete with autodealer's zero-financing offers? One way that's never been tried byCUs, according to officials at Truliant FCU here, is a program theyconceived called the zero-rate loan.

Members using Truliant's zero-rate loan option essentially buydown the rate of the auto loan, financing all the interest upfront, lowering the finance cost and the monthly payment, said RyanShell, TFCU's marketing communications supervisor. "People arekeeping cars longer so it's becoming more important that auto loansbecome more affordable to our members."

Troy Martens, Truliant FCU loan manager, said the idea cameabout to directly compete with auto dealerships that advertise andpush zero financing. Such zero-finance options are usually veryrestrictive, as the CU points out in a Web site set up to marketthe program at www.zerorateauto.com. The loan is available for bothnew and used cars, he said, and requires normal credit, in otherwords, no subprime loans allowed. Borrowers can expect to save asmuch as $1,200 in interest over the life of the loan. The maximumterm is 60-months, and the highest amount per loan is $30,000.