Ford will offer zero-percent financing for three years on all 2007 Ford, Lincoln and Mercury models and additional cash on some vehicles as it tries to clear showroom floors at the end of the month.
The sale, which begins on Thursday and runs through July 9, will offer an additional $2,007 in cash to customers buying 2007-model Ford, Lincoln or Mercury trucks or sport utility vehicles.
The announcement comes after larger rival General Motors said on Tuesday it would offer qualified buyers zero-percent financing for three years with an additional $1,000 cash on select vehicles.
GM's discount program would be available on select Chevrolet, Buick, Pontiac and GMC vehicles and would run June 26 through July 9.
Both GM and Ford have held incentive spending largely flat this year to move away from the kind of blowout sales and volatile monthly sales tallies that dogged results for the Detroit automakers earlier this decade.
But U.S. automakers typically offer big consumer incentives in the summer months just as they are working down inventory levels in anticipation of a new year of model launches beginning in the fall.
Detroit's automakers have been struggling to hold their retail market share amid near record-high gasoline prices, a weak housing market and fierce competition from Japanese rivals led by Toyota -- which earlier this month announced its own rebates of up to $3,500 on the Tundra pickup truck.
GM vice president of sales Mark LaNeve told reporters last week the overall U.S. auto market remained "challenging," but "not awful."
U.S. auto sales rose just under 1 percent in May, adjusted for an extra selling day. GM chief sales analyst Paul Ballew last week said July sales resembled the trend set in May.
On an adjusted basis, GM's sales rose 6% in May, while Ford's sales fell 10%.
Auto sales incentives are widely tracked by analysts as an indication of the relative profitability of competing automakers and the pressure they face to move inventory.
Automakers do not typically disclose how much they spend on incentives, which can include concessional financing, cash rebates or additional payments to dealers.
GM's average incentive spend per vehicle through May this year was $2,775, up slightly from $2,704 a year earlier, according to an estimate by industry tracking firm Edmunds.
Ford's average spend was $3,084, down slightly from $3,131 a year earlier.