Ford has announced zero percent financing for as long as 60 months on select 2010 models, following similar moves by Toyota and GM. Ford will offer zero percent for 60 months on Focus and Fusion, and 72 months for the soon-to-be-replaced Explorer and SportTrac, as well as the aging Ranger.
Ford has announced a new incentives program that will help boost sales and keep pricing competitive with GM and Toyota ’s recent announcements for extensive rebates and low financing offers.
Toyota came under fire when it announced its ‘March Sales Event’ as it offered zero percent financing on many of its vehicles, a move analysts believe may contribute to lowered resale value which has plagued domestic automakers for decades. Toyota is already suffering from ongoing resale value losses as a result of the recent recalls, making the sales event a risky move.
GM soon followed suit, offering low finance rates on roughly half of its own vehicles in order to boost lower than expected sales for February. GM, like Ford and Chrysler , has a history of overproducing vehicles and relying on heavy incentives to move vehicles off of the lots at the expense of resale values for customers. For March 2010, however, GM seemed to target only key vehicles that were particularly low on sales, as opposed to fleet-wide offers typically given in the past.
Ford has been enjoying large gains in estimated resale value on its new vehicles over the last 18 months, putting their recent decision to offer zero percent financing in similar questionable territory as Toyota. Ford’s zero percent interest rate will be limited to certain models, like GM. In addition to gains in resale valuation, Ford has also enjoyed increased market share – becoming the largest automaker in the US for the first time in 12 year by outselling GM in February.
Ford’s gamble to match incentives by GM and Toyota shows that they wish to remain competitive on pricing and market share, and are hedging their bets that GM and Toyota will suffer similar resale value decreases, nullifying any drops that Ford may suffer as a result of the sales event.
