Comments on: GM Offering 0% Financing to Move the Metal. Again.

By: racebeer

racebeer — Tue, 24 Jun 2008 13:20:08 +0000

GM and Ford aren’t the only ones playing this game. I saw an ad on the tube last night for a ‘08 Corolla — $179/month lease or 0% for 60 months financing. That has got to be a stab in the eye of the domestics since the Corolla isn’t exactly a “slow seller”. Add the new Tundra/Silverado SS to the mix, and the boys from the land of the rising sun are really trying to deliver a knockout punch. I guess Camry’s at 0% for 72 months are next.

By: nudave

nudave — Tue, 24 Jun 2008 10:49:10 +0000

If you think this is a great deal, just wait for the going-out-of-business final liquidation sale.

By: RayH

RayH — Tue, 24 Jun 2008 03:50:18 +0000

Where was it said that “anyone with a pulse” gets financed? The fact is that each applicant is graded by a 6 rung tier system. Only the top 4 are eligible for incentive rates
I think that’s how it has been since the start, in the disclaimer. Robert has written of “anyone with a pulse”. I read articles in magazines and newspapers calling into question their criteria. I know two self-employed with marginal credit who couldn’t get less than special financing on a used truck who got 0% on new Silverados, with no income verification. One of them I know had under a 600 beacon score a couple weeks after buying the truck because I helped him get everything organized for entering consumer credit counseling.
Since they don’t fully own GMAC now, it might not be the case this time around, but who knows for sure?

By: rtz

rtz — Tue, 24 Jun 2008 02:17:05 +0000

I know where there is a gravel parking lot full of tag less Malibu’s sitting behind a barb wire fence.

By: 50merc

50merc — Tue, 24 Jun 2008 00:49:15 +0000

HarveyBirdman observed, “it really doesn’t seem wise for GM to go on a big financing binge just to try to prop up what are sure to be abysmal sales numbers in June.”

That’s right. But what if they can’t afford to do otherwise? What if–

– June 30 is the end of a quarter and may also be a key reporting date under the terms of the loan agreements. Does anyone outside GM or the lenders know exactly what’s in those covenants? Perhaps GM will be considered in default or subject to penalties if market share falls below X%, or if unencumbered cash falls below $Y. (Lenders presumably want debtors to maintain unencumbered cash well over what’s needed just for payroll.)

– Dealer inventories may be so swollen that their orders for ‘09 models have collapsed. GM makes money by shipping cars to dealers. Moreover, the moldier those ’08s get, the bigger the incentives must be to move them out.

It looks like a hot, dry summer for GM.

By: rtz

rtz — Tue, 24 Jun 2008 00:20:31 +0000

If they had something electric at about $20k, I’d buy something with that zero percent.

If they really want to move some serious metal and clear their lots and cause shortages; how low can they go on the monthly payment?

What if I could go in and by any model GM product at a rate of 50 a month? 100 a month? 150 a month?

I’ll take a Z06 at that price point!

I would buy one today at $50/month zero interest.

They would sell out of vehicles in days at 50/month.

Can you imagine what that would do to the car market and industry? Everyone driving around in essentially free cars.

By: HarveyBirdman

HarveyBirdman — Mon, 23 Jun 2008 22:56:44 +0000

I’ve got a dollar in my wallet I’ll pitch in.

In light of GMAC’s woes with ResCap, it really doesn’t seem wise for GM to go on a big financing binge just to try to prop up what are sure to be abysmal sales numbers in June. It seems like this company is hellbent on sacrificing its future financial solvency at the altar of short-term sales.

By: Michael Karesh

Michael Karesh — Mon, 23 Jun 2008 21:56:04 +0000

Yep. If we pool our pocket change we can probably buy GM.

By: hltguy

hltguy — Mon, 23 Jun 2008 21:26:42 +0000

What is stunning is that at the end of the business day today, GM’s market cap is down to $7.3 billion dollars.
Wow.

By: Jeff Puthuff

Jeff Puthuff — Mon, 23 Jun 2008 21:14:41 +0000

This is interesting. Saturday night on TV I saw several ads for Chevy trucks with financing at 0% for 72 months. I guess the “Northern California Chevy Dealers” marketing group couldn’t wait.

By: Matthew Danda

Matthew Danda — Mon, 23 Jun 2008 20:48:38 +0000

Anyone check out the used car lots lately? I saw gently used Sclades and Avalanches and Yukahoes for about the same $$$ as new Priuses. Who needs to buy new? Used truck prices are amazing now.

By: jwltch

jwltch — Mon, 23 Jun 2008 20:41:32 +0000

I remember when this special 0% financing started in 2002. It lured me into the Chevy dealer for a new Impala (a great car, actually…took a LOT of Chicago driving abuse). I remember it was late summer and would ending by the end of summer. They extended it…and extended it. It seems, however, that they’ve never been really able to get away from it.

By: Skooter

Skooter — Mon, 23 Jun 2008 20:39:00 +0000

Where was it said that “anyone with a pulse” gets financed? The fact is that each applicant is graded by a 6 rung tier system. Only the top 4 are eligible for incentive rates. Is it true 0%? Yes, in lieu of any other rebates. Customer spending the most money with the least amount as down payment will benefit greater at 0% while a larger down payment and more money down would use rebate.

By: hltguy

hltguy — Mon, 23 Jun 2008 20:29:59 +0000

Here in Bakersfield, California, in yesterdays newspaper, full page ad, Ford is offering “Zero percent financing PLUS $3,000.00 rebate PLUS Employeee Pricing” on F-150 pickups.
So it goes……

By: Bunter1

Bunter1 — Mon, 23 Jun 2008 20:18:47 +0000

The 28% sales drop speculation is especially nasty for GM.
IIRC last June and July were nasty ones (15-20% down?) for the General. What will they sell vs. 2006, half?

Frank, I think you may need a market share chart to really clarify who is connecting with the (remaining) buyers in the June BTN.
Just a thought.

I don’t think 0% will do much.
This is getting U-G-L-Y.

Bunter

By: Redbarchetta

Redbarchetta — Mon, 23 Jun 2008 20:06:52 +0000

I wonder what the deals will be like at the end of summer since the prices have to drop drasticly to sell all the overstock of SUV’s and trucks they have. This 0% deal isn’t going to move as much stock as they need before the 2009’s start rolling out. I’m going to stop by our local dealer to see if the 2007 that were there 2 months ago are still there, I bet they are.

By: jaje

jaje — Mon, 23 Jun 2008 20:06:16 +0000

Can they afford “anyone with a pulse” financing anymore? GMAC, Ford Credit are getting killed from the past 3 years selling trucks/suvs to those who couldn’t afford them in the first place and who are now defaulting on payments b/c they can’t afford food or gas. GMAC’s credit is so bad now how can they get 0% financing as GMAC’s cost to get credit has increased over the past 2 years – GMAC is no longer investment grade meaning it costs them more to borrow money to loan to buyers.

By: RayH

RayH — Mon, 23 Jun 2008 20:01:51 +0000

Anybody with a pulse again, at least by the end of this promotion, I’m guessing? Maybe they could lower the criteria… no driver’s license needed, no need to verify insurance. Get 10% off for every hitchhiker you pick up and bring in.

By: brettc

brettc — Mon, 23 Jun 2008 20:01:32 +0000

I doubt it’s only going to last for 7 days. They’ll probably extend it until Labour Day to clear out the “new” 2007 models too.

By: Facebook User

Facebook User — Mon, 23 Jun 2008 19:45:11 +0000

I saw Ford’s ad for “Employee Pricing” and 0% on select models as well.

I don’t suppose the Corvette would be one of the “most Chevrolet and Buick-Pontiac-GMC products” that is getting this deal?

By: Perkins

Perkins — Mon, 23 Jun 2008 19:39:42 +0000

Is it true zero percent financing?

In Canada you must give up price reductions that you would normally get if you paid cash. By Ontario law the small print must show the “effective” interest rate if the customer takes the zero percent offer. In reality the customer is buying down the rate.

(Ford on the other hand has some bona fide zero percent offers. For example, I can buy a 2008 Ranger, get a manufacturer allowance and dealer discount AND zero percent for up to 60 months.)

GM looks bad no matter how you look at this.

By: Buickman

Buickman — Mon, 23 Jun 2008 19:09:15 +0000

it’s all very confusing to the dealers. we are waiting for clarity and attempting to figure out compatibility and stackability with other existing incentives.

then there’s July. what in the world will dealers do when this ends? GM just does not get it, that it’s exactly this kind of marketing which has caused them to lose so much business. yet they continue and expect different results.