A Delaware bank will begin offering a new type of automobile loan today to qualified customers. Even though no down payment is required, monthly payments are 20 to 45 percent lower than with conventional financing.

The loan is similar to a lease arrangement, with a final "balloon" payment -- equal to a predetermined value set by the bank of between one-third and one-half the car's sale price -- due when the loan term is up.

Borrowing a concept from BankAmerica and the Royal Bank of Canada, Delaware Trust Co. of Wilmington claims to be the first East Coast financial institution to offer consumers tax write-offs similar to those business customers can take on leased vehicles.

A new car priced at $12,084 can be financed for as little as $244 per month for 47 months. A luxury import with a sticker price of $31,940 can be obtained for one year for just $11,931 after taxes.

The customer also can make a down payment, which further reduces the payments.

The balloon payment is supposed to equal the market value of the car at that time. For example, after four years, the customer who purchased the $12,084 car would owe approximately $6,000; after one year, the owner of the $31,940 car would owe $21,950. The annual percentage rate on both loans is 14.5 percent.

If the owner neither repays the balloon nor sells or trades the car before the loan maturity, the bank either will take the vehicle back or refinance it at the market rate for used cars.

Repairs and mileage over 18,000 miles will be added to the finance costs. Customers need no prior relationship with the bank or compensating balance. The offer is open to residents of other states.

Because low-equity financing carries a risk for the lender, only upscale customers qualify. The plan most benefits owners in the highest income tax bracket and works best with expensive cars that depreciate little, said William J. Bradley, Delaware Trust's senior vice president for retail banking.

For example, the $31,940 luxury import can be financed for one year for $1,263 a month. Half of the $3,903 annual interest payment is tax deductible for someone in the 50 percent bracket. So the real cost for one year of ownership is $11,931. At year's end, the customer either can pay the balloon of $21,950, trade the car in for a new model, or sell it for perhaps more than the amount of the balloon, which represents 68 percent of the original price.