By Kevin Miller
In these bleak economic times with auto sales are at historically low levels, automakers are looking for any available angle to help make a vehicle sale. At the same time, many consumers are postponing big purchases (like cars) and holding on to their money, for fear of losing their jobs. Hyundai has come up with a program to help put prospective buyers’ minds at ease: the Hyundai Assurance Program.
The program, which is the only one of its type in the industry, provides US customers with a complimentary vehicle return for the first year on every new Hyundai that is financed or leased, in the event of involuntary loss of income or other qualifying circumstance. The Hyundai Assurance Program is complimentary to all buyers for one full year, and covers all Hyundai models. In a nutshell, the program offers forgiveness of the loan and up to $7500 protection against being upside-down on the loan. Basically, if you buy or lease a new Hyundai, and you lose your job within the first twelve months of vehicle ownership, you can return the car to your Hyundai dealership with no negative consequences which would damage your credit score (within the terms of the program, of course).
Hyundai’s program is essentially a private-labeled version of WALKAWAY, an automotive finance protection product which is being offered to Hyundai exclusively by WALKAWAY USA. Since its introduction in Canada in 2000, WALKAWAY coverage has allowed consumers to walk away from over $35 million in automotive-related debt arising from the depreciation of new and used vehicles (negative equity). The collaboration between WALKAWAY and Hyundai should benefit Hyundai by driving more sales and should benefit WALKAWAY by bolstering their bottom line, which has surely been affected by this year’s dramatic decrease in vehicle sales.
This is a clever marketing move on Hyundai’s part, and it will be interesting to see whether it actually increases vehicle sales. Of course, if consumers end up returning vehicles under this program, they’ll need to come up with a new ride, which may financially be tough to do when they are unemployed; though it will be a preferable choice to making several-hundred-dollar-per-month car payments. In any case, the text of Hyundai’s press release is below.
HYUNDAI MARKS THE 10-YEAR ANNIVERSARY OF “AMERICA’S BEST WARRANTY” WITH THE LAUNCH OF THE “HYUNDAI ASSURANCE PROGRAM”
Hyundai Assurance Program Provides New Car Buyers Who Lose Their Income Protection Against Negative Equity and Credit Rating Concerns
FOUNTAIN VALLEY, Calif., January 2, 2009 – Hyundai Motor America announced today an unprecedented program to protect consumers in this uncertain economic environment. Beginning today, Hyundai is providing a complimentary vehicle return program for the first year on every new Hyundai that is financed or leased for owners who experience an involuntary loss of income within 12 months of the purchase date. The “Hyundai Assurance Program” expands the protection offered through “The Hyundai Advantage: America’s Best Warranty,” which has provided 10-year, 100,000-mile powertrain protection to Hyundai owners for a decade. The Hyundai Assurance Program is complimentary for one full year, covers all Hyundai models and is available to everyone.
“We understand consumers’ hesitance to commit to large purchases in today’s economic environment,” said John Krafcik, acting president and CEO, Hyundai Motor America. “Ten years ago, Hyundai’s industry-leading warranty provided peace of mind to consumers about Hyundai’s quality and reliability. Today we’re extending that peace of mind to cover consumers’ employment status and personal finances.”
The Hyundai Assurance Program, the first of its kind for an automaker in the U.S. auto industry, allows consumers to walk away from a financing obligation when certain adverse life events occur, providing protection from financial shortfalls that arise from vehicle depreciation (negative equity) up to $7,500.
The Hyundai Assurance Program complements America’s Best Warranty as standard protection on new vehicles financed or leased from a participating Hyundai dealer, and supplements all existing consumer incentives. The program is available to any consumer, regardless of age, health, employment history or financed amount of the vehicle. The program is complimentary for the first 12 months of the financing or lease date for vehicles financed through Hyundai Motor Finance Company and other third-party lenders and financing sources. Covered circumstances include:
• Involuntary unemployment
• Physical disability
• Loss of driver’s license due to medical impairment
• International employment transfer
• Self-employed personal bankruptcy
• Accidental death
Consumers must have made at least two scheduled payments on their loan or lease, be current on all payments and pay for any outstanding balance above the $7,500 benefit amount which results from negative equity. Once the benefit is approved by the Hyundai Assurance administrator and the customer pays any outstanding balance, the customer returns the vehicle to the selling dealer, whose appraisal is factored into the valuation formula, and the consumer avoids further financial obligation or negative impact to his/her credit. The dealer is then able to remarket the vehicle.
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