Honda warns against 'stupid' sales incentives

A top US executive at Honda Motor Co said competitors are doing "stupid things" to boost auto sales, including making seven-year-long car loans that harm buyers.

Automakers are increasingly selling vehicles with 84-month loans that reduce monthly payments while making it tougher to repay faster than cars lose value, said John Mendel, Honda's US sales chief. The Tokyo-based company will avoid longer-term loans even as Nissan Motor Co tries to supplant it as the fifth-biggest automaker in the US, he said.

"You're ringing the bell on a new-car sale, but that customer is saddled - they're stretched so thin," Mendel said at the North American International Auto Show last week. Extended-term loans are "stupid not just for us, but for the industry".