General Motors

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said it will offer interest-free loans until Sept. 30 on all of its remaining 2002 vehicles, in response to discounting by rivals.

GM, the world's largest automaker, said it will offer loans with no interest for up to five years on all its 2002 models, and also boosted cash rebates on a number of models.

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"Competitors have very aggressive programs, and people are out in the market shopping for '02 bargains, so we wanted to make sure we came in with a very strong program," GM spokeswoman Julie Hamp said.

GM Vice Chairman and Chief Financial Officer John Devine told analysts earlier this week that September's sales wouldn't reach August's highs, in part because GM was "basically sold out" of 2002 models, while rivals still have the inventory to lure car buyers with attractive deals.

GM had introduced no-interest financing to boost declining sales following the Sept. 11 attacks. Earlier this month, the company said it was offering financing as low as 1.9% on some 2002 vehicles through Jan. 2. It also said it would offer 0% financing for three years on some 2003 vehicles.