NEW YORK (CNN/Money) - General Motors Corp. announced zero-interest financing on its 2002 models Tuesday, reintroducing the popular incentive that helped drive auto sales to record levels last fall.

The world's largest automaker is offering the zero-interest package for a minimum three-year term on all makes other than Saturn, Saab and Hummer, and many models have the zero-interest option for as long as five years. Buyers also can choose cash rebates of between $1,000 and $4,000 instead of the lower financing.

The incentive is intended to help clear space for the 2003 models due in showrooms in the next few months. GM (GM: down $0.19 to $50.63, Research, Estimates) already was offering financing as low as 1.9 percent, generally on short-term financing offers.

"It's a program that has been crafted for a period of time -- it was not created due to weak sales in May," said Paul Ballew, executive director for market and industry analysis at GM, talking to analysts about June sales figures. "We are on the offensive and we plan to continue to be on the offensive. We believe simple and compelling works, and we believe leadership brings its own benefits."

GM led other major automakers into a round of zero-interest financing last fall in the wake of the Sept. 11 terrorist attacks, and that widely-followed incentive, which continued until early this year, helped the industry post record U.S. sales in October. But the program was costly, and GM's two largest competitors, Ford Motor Co. and Chrysler Group, the North American unit of DaimlerChrysler AG (DCX: Research, Estimates), both ended up posting losses after matching the incentive. Ford estimates that about 15 percent of its auto sales revenue has gone to market programs such as incentives, advertising and other promotion during the last year.

Ballew said that GM's new incentive program is within the company's earlier guidance on marketing costs for the quarter.

Ford, which followed GM's lead in incentives last fall, did not immediately match GM this time. Its incentive package, announced to dealers late Monday and released early Tuesday, offers very limited zero-interest coverage on only a handful of models, such as the Crown Victoria sedan, the Econoline van and F-series Super Duty pickup truck, and only for three years. The five-year financing rates range from 2.9 percent to 4.9 percent on various models, and the cash-back alternative ranges from $500 to $3,000.

But Ford (F: up $0.28 to $15.80, Research, Estimates) executives said Tuesday they were evaluating the GM program and that they may respond with higher incentives.

"It's premature to say one way or another at this point what we'll do," said George Pipas, Ford's head of sales reporting and analysis. "We owe it to our customers and our dealers ... to be competitive in marketplace. (Ford CEO) Bill Ford said earlier this year we won't be left at the gate."

Chrysler did not have an immediate response. The Wall Street Journal reported Tuesday Chrysler is weighing continuing its extended warranty as an inducement.

GM's move comes as the major automakers released June sales data Tuesday. Though GM reported increased sales, both Ford and Chrysler reported weaker overall sales. The Journal said some auto dealers attributed weaker June sales to softness in consumer confidence, a key driver of auto sales, possibly keying this new round of incentives.