Carmakers Sweeten the Deal


Carmakers Sweeten the Deal

Can you really return the car if you lose your job?

Editor's note: This story has been updated.

Faced with sales so bad they're breaking records, automakers have pulled out all the stops on incentives. The average inducement was $3,169 per vehicle sold in March, up 30% compared with March 2008, according to But a few of automakers are finding novel ways to entice financially shell-shocked customers.

Hyundai is tapping into the fear of job loss with its Assurance program. "We're all in this together, and we'll all get through it together," assures the voice-over for Hyundai's recent ads. Here's the deal: If you buy or lease a new Hyundai then lose your job in the following 12 months, Hyundai will let you return the car. They'll also forgive up to $7,500 in depreciation on the car, so in most cases you simply drop off the keys and walk away.

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The idea came from focus groups the carmaker worked with last fall, says Joel Ewanick, vice-president of marketing for Hyundai. "We could see the market changing, and people were significantly nervous about their income in 2009," he says. "This is not your garden-variety recession, and it seemed that no matter how great the deals were, what was going to hold people back from buying a car was this fear."


The program is slated to run at least though 2009. But Hyundai has already taken the program one step further, with its Assurance Plus program. Assurance Plus will kick in a 90-day payment-relief benefit in the first 12 months if you lose your job or become disabled. Paid as a lump sum to your lender, the benefit never has to be repaid, even if you later decide to return the car.

But if you do turn in the car, your three-month car payment is deducted from the $7,500 depreciation forgiveness. For example, if your 90-day payment is $1,200, and your car is worth $6,500 less when you turn it in, you'd still owe $200. The Assurance Plus program will cover any car bought through April. And for both programs, you have to have made two payments on your loan or lease and have been employed for at least 90 days prior to losing your job before filing for benefits.

Hyundai says the programs are working. They're driving showroom traffic and sales, and so far there have been no returns. "This program is changing the way people think about Hyundai," says Ewanick. And it's not just marketing, he insists. "Assurance was designed to give people peace of mind in these hard times."

Look-alike plans

Nearly four months after Hyundai unveiled its Assurance program, Ford and GM jumped on the bandwagon with buyer assurance programs of their own. The big difference is they're designed like Assurance Plus-to be payment guarantees, rather than turn-in programs.


Ford's "Advantage" plan will cover payments for up to 12 months with a $700 monthly maximum on any new or leased Ford, Lincoln or Mercury. Ford's Swedish nameplate, Volvo, is excluded from the program. The program is good on vehicles purchased or leased from March 31 through June 1 and claims can be filed until December 31.

GM's "Total Confidence" program applies to new 2008, 2009 and 2010 vehicles from all brands under its umbrella except Saab. If you lose your job within two years of ownership, the program covers your payments up to $500 a month for up to nine months. The program covers vehicles purchased or leased through April 30.

As with Hyundai's plans, for both Ford and GM's programs you must be employed for 90 days prior to becoming involuntarily unemployed. With GM's program there's an additional requirement: You must be employed for a full 90 days following your purchase or lease.