GM offers 6-year, no interest loans
Promotion to clear out backlog of some models. Price increases for some 2009 models announced.


2008 Chevrolet Tahoe: Customers trading in another GM vehicle could get up to $7,000 in cash on an SUV like this one.

NEW YORK (CNNMoney.com) -- General Motors will offer large financing incentives to clear out a backlog of 2008 model year vehicles, the nation's No. 1 automaker said Monday.

At the same time, GM (GM, Fortune 500) announced price increases averaging 3.5% on most 2009 models.

GM also announced it is cutting production of trucks and SUVs through the end of the year. Sales of large pick-up trucks and SUVs have been down sharply this year as gas prices have risen and the economy has slowed.

The company also announced it has engaged Citibank to help with a previously announced strategic review of the company's Hummer SUV brand.

Citibank will help GM assess possible offers to purchase the brand from GM, said Mark LaNeve, GM's vice-president for marketing in a conference call. Citibank will also help GM assess other options for Hummer, including a possible revamp of the brand's model line-up.
Incentive deal

The carmaker will offer 0% financing for loans as long as six years on most of its 2008 models. Vehicles included in the program range from large SUVs such as the Chevrolet Suburban to small two-seat sports cars like the Pontiac Solstice.

The promotional program - which will only be available from Tuesday through next Monday, June 30 - will be called the "72-hour sale," the company said.

"We're really trying to spark the market here at the end of the quarter," LaNeve said.

The name of the promotional program comes from the number of hours the typical dealership will actually be open for business during that time.

GM's most popular newly introduced or redesigned models are not included in the promotion. Customers will not get 0% financing on the Chevrolet Malibu and Cadillac CTS sedans or on the company's new three-row crossover SUVs. Hybrid vehicles and other models that are already selling well are also not included in the offer.

For customers financing $30,000 on a new vehicle purchase, 0% financing would be worth almost $8,000 compared to current rates, said Jesse Toprak, an analyst with the automotive Web site Edmunds.com.

Car companies usually offer 0% financing incentives for shorter loans, said Toprak, but six-year 0% financing programs are not unheard of. Because of the expense of forgoing interest payments for so long, deals like this are usually available for short periods of time, Toprak said.

Customers trading in a GM car or truck they now own who forgo the financing offer may be eligible for cash incentives that could total as much $7,000 on some vehicles if they're combined with existing programs.

"We feel this an absolute screaming deal that we hope will spark some traffic and some momentum," said LaNeve.

GM hopes to clear out an inventory that, while low by historic standards, LaNeve said, is now skewed toward large trucks and SUVs because those vehicles have been selling slowly.