DETROIT -- General Motors Corp. is cutting the interest rates on new car loans to 12.8 percent -- nearly 5 points lower than the current level -- in another attempt to boost sales that are down 30 percent from last year.
GM said Tuesday the lower rated loans will be available for two months, beginning Thursday and running through May 31. The rates, which are almost 5 points lower than present rates, are available for new cars, light-duty trucks and vans.
GM has offered rebates on its autos since the beginning of February. While maintaining its sales rate is up over last year, the automaker's actual sales for the period have dropped 30 percent from 1981.
Economists have said the industry's current three-year slump is due in part to the 'sticker shock' of high car prices plus skyrocketing interest rates.
GM said the 12.8 percent financing rate will save customers an average of $825 over the life of a typical loan. The average GM car now costs about $11,000.
The average GMAC loan in February was for a principle balance of $7,648 over 45 months. This is after a down payment or trade in. The going rate for GMAC loans is 17.6 percent.
'This new across-the-board financing program gives our customers the opportunity to get the vehicle they want and need at a highly attractive financing rate,' said Robert Lund, vice president of sales and marketing.
'This 12.8 percent rate will provide the spark needed to get sales into high gear as the industry enters the spring selling season.'
Chrysler Corp. announced Monday it is extending its current rebate program.
GM's 12.8 percent rate will be available from participating dealers in the United States except in Arkansas and Texas.
The rate is not applicable to cars ordered under GM's current 'Let's Get Moving' rebate program, which offers price cuts between $500 and $2,000 on selected models.
GMAC offered a similar reduced rate program during the second six months of 1981. The financing arm said the rate resulted in record lending volume for the period because more than 500,000 customers purchased cars at the lower rate.
