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Zero Percent Financing Disappearing, But Not U.S. Consumers

May 6, 2002

The end to zero percent financing at the nation's two largest carmakers will do little to dampen consumers' willingness to buy cars or the pace of car sales going forward, economists say, according to the Wall Street Journal.

That's good news for the economy, because auto sales make up a prominent part of consumer

spending, which continues to be a key pillar of support at a time when the U.S. economy is still challenged by weak business spending

patterns.

Many economists said they don't expect carmakers' change in strategy to undermine consumer spending, partly because the carmakers

are replacing zero percent financing deals with other deal sweeteners such as rebates, and partly because underlying consumer demand remains robust.

Indeed, some even viewed the shift as a sign of strengthening consumer confidence, in the sense that car makers don't fear an end to the financing programs turning customers away, according to the Journal.

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