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Buyer Beware: 0% U.S. Auto Financing May Be History

Carmakers are starting to abandon the attractive offers as their own borrowing costs mount

Automakers that used zero-percent financing offers to juice car sales at the height of the American auto boom are starting to abandon them as rising interest rates lift their own borrowing costs. Zero-percent offers fell to 7.4 percent of new loans in March, down from more than 11 percent the prior year, car-market researcher Edmunds said. “Nobody wants to be the first one to go from zero to 0.9 percent, or from 0.9 percent to 1.9 percent, but you’re going to see zero no longer be the norm,” said Jim Lentz, head of Toyota Motor Corp.’s North American operations. “That will impact, marginally, some people getting pushed out of the market.”

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