In announcing the GM 72 hour sale today, GM announced to the world how desperate things are for General Motors. The GM 72 hour sale starts tomorrow and runs until next Monday. Stop by your local Chevrolet dealer and you’ll be able to get a new car with 0 interest and 72 month financing. You read that right, NO INTEREST and 72 Months financing.
The offer is being made on most Chevrolet, Buick, Pontiac and GMC cars and trucks. While this sounds good for the consumer, there’s a couple of flaws in the works. First off, how many people keep a new car for 6 years? Generally, most people are trading in their old Chevrolet for a new one after 4 years. Used to be 3 but now it’s 4. Sure the cars are lasting longer but do you still want to be paying for your old Buick 6 years from now?
The other big problem with the GM 72 hour sale, and where it’s going to come back and bite GM in rear is that, if you are giving people cars with 0 interest, it’s the same as lending money with no interest. The value of your money, due to inflation, is going to be worth a lot less in 6 years than it is now.
Think of it this way, if I give you a dollar today and inflation runs 3% for the next 6 years, when you pay me back my dollar 6 years from now, it’s only worth 82 cents. So what kind of investment is that for GM. Sure they sell a few cars and trucks today, but the long term cost is very damaging to the companies bottom line.
The GM 72 hour sale is nothing but a gimmick by GM to boost their June sales. In the long run it’s going to hurt the company. In the interest of full disclosure, I own some GM stock, and I am really not happy with the GM 72 hour sale.