Will Zero-Percent Work for Toyota?

Washington DC October 6, 2008; The AIADA newsletter reported that Toyota Motor Corp.'s unprecedented offer of zero-percent financing on nearly a dozen models is trying to make the point that tight credit is no excuse for buyers — in fact, it's literally giving credit away for free.

But after the top Japanese automaker posted a 32 percent drop in September sales that only domestic competitors had experienced until now, the question is: Is it enough to get people to buy?

"I don't think it's going to just open the floodgates," said Jessica Caldwell, an analyst at the auto Web site Edmunds.com. "But it's going to help a lot of people who want a quality car, who don't want to worry about it, and are now going to be able to afford it because of this deal."

David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., told MSNBC that Toyota may be among the best-positioned automakers to weather the credit storm. "Toyota has absolutely gold-plated credit," Cole said. "They've got $30 billion-plus in the bank. So whatever happens from a financial standpoint, they're not going to be impacted too severely."