I just saw an ad tonight for auto financing at 0% for 72 months. Chevy is rolling out a program (endorsed by Suze Orman, no less) where you can lock in a low rate not only for the car you are buying now, but your next Chevy as well. You must buy your next car within the term of your current loan, and I seriously doubt that it would be very easy to qualify for a 0% for 60 month loan under this program on a 2005 model, but probably on the 2004 models that they are trying to get rid of.
If you're willing help them dispose of their inventory, you might be able to essentially lock in 0% for 10 years. At least that's my understanding from their web site. See my update here (after I saw the commercial again).
Am I the only one who is a little worried about all this? Read this recent story on the decline in auto sales. The last company to get too aggressive with financing didn't fare so well. Remember when Mitsubishi was giving 0% and no down payment and no payments for a year to just about anyone? Well, the Big 3 aren't exactly being that silly, but still, it gives one pause.
Now, here's a thought. These 0% deals might just be the new normal. We've been at this level since shortly after 9/11. That's a long time, and people are used to it. No one wants to be the first to raise those financing rates, especially in an auto market that is lukewarm at best. (Think: kinked demand curve model of oligopoly.) In that case, 0% is here to stay, at least for the forseeable future. It will almost take another shock (e.g. a bout of inflation) to dislodge us away from this equilibrium.
Take notes, folks. This could get interesting.
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