Ford on Tuesday responded to a costly consumer incentive programme at rival General Motors by extending its offer of interest-free loans for up to five years across much of its vehicle lineup, Reuters reported.

Like GM, which extended its incentives programme for another month last Thursday, Ford is offering rebates of $US3,000 as an alternative to interest-free loans, Reuters said

Zero-percent financing was introduced by GM to boost sales and consumer sentiment after the September 11, 2001, attacks on the United States and all three Detroit automakers have relied on zero-percent deals and other incentives heavily since then, even as they acknowledge that the deals hurt profits and are becoming increasingly less effective in offsetting a shaky US economy, Reuters noted.