Detroit rolled out zero percent to jump-start the car market after September 11, but the come-on is still packing ’em in. Last month car sales roared ahead to set a record. GM, the first to offer zero-percent financing after the attacks, was assailed for capitalizing on the tragedy and steering the industry into “profitless prosperity.’’ Now GM is hailed as the savior of the economy. And GM’s prosperity is anything but profitless. Last week GM boosted its earnings forecasts. “What’s good for GM is still good for the U.S. economy,’’ says GM’s chief market analyst, Paul Ballew. Not so fast, says Ford. Though it has followed GM, Ford worries Detroit is feeding a bad habit. “Zero percent is like dope, and each time the addict wants more,” says Ford market analyst George Pipas. “But it’s hard to go lower than zero.”
For all the allure of interest-free loans, only about 9 percent of car buyers end up with zero, according to CNW Marketing Research. Many car buyers don’t have clean-enough credit to qualify, while others opt for cash rebates. But for filling the showroom, nothing beats zero. “Once we get them in here,” says Dela-ware dealer Frank Ursomarso, “they may not walk out with zero percent, but they’ll drive out in a new car.” Zero, it seems, has more horsepower than anything Detroit has ever rolled off an assembly line.
