Blog: Dave LeggettGM's negative interest rate loans

Dave Leggett | 26 January 2004

Glenn Brooks has been in touch to draw my attention to GM-Daewoo's latest marketing wheeze in South Korea where the company is trying to rebuild share lost when Daewoo Motor went bust a few years back. Yes folks, GM-Daewoo is offering buyers of its cars negative interest rates (-1%) on loans taken out. That means the borrower is paid for taking on the debt, rather than paying the lender for the privilege. Bonkers economics of course and it is effectively a cashback under another name. But it has attracted a fair bit of interest and GM-Daewoo boss Nick Reilly has been proclaiming the move as evidence of GM-Daewoo's innovative approach. I wonder if negative interest rates could catch on elsewhere?

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