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With sales falling, car makers throw in zero-percent deals

The auto industry rolled out zero-interest financing in July, trying to entice buyers to their showrooms amid falling domestic sales.

Efforts to jump-start sales also included lengthening car loans and offering lower interest rates.

Zero interest rates are the car makers’s way of cutting the bank out of the deal, essentially giving the credit buyer the chance to pay the same amount as a cash buyer but spread the car sales price over installments.

As for the banks, interest rates on new-vehicle loans fell to a six-month low in July, to an average of 4.77% down from 4.96% in June, according to Edmunds.com.

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