The New York Times reports the European Central Bank may have inadvertently helped buyers looking to take home a new Volkswagen Up! secure low-interest loans. Volkswagen Financial Services was one of many institutions that took advantage of the €1 trillion the central bank set aside to be loaned out at just one percent interest. Volkswagen borrowed €2 billion (about $2.6 billion USD) of that money, and plans to offer the cash to buyers in the form of loans with low three to four percent interest. While the goal of the low-interest loans was originally to stabilize uncertain markets, automakers and other industries are taking advantage of the effectively free cash.
Mercedes Bank has already taken advantage of the generous terms, and PSA Financing, a unit of Peugeot and Citroën, has made mention of doing the same in an attempt to stave off looming poor sales. According to The New York Times, the European auto industry may be facing down its second downturn since 2009. Registrations for new vehicles were down 8.3 percent between January and February of this year compared to the same period in 2011.