As automakers struggle to sell cars in a weak economy, one company has introduced a unique program to help wary consumers. Hyundai now offers its Hyundai Assurance program, which allows a purchaser of a new Hyundai vehicle to walk away from a loan obligation if he or she is unable to make payments. The gesture is an attempt to instill confidence in buyers who may be uncertain about their financial picture in the coming months. The program is unique in the industry, and it remains to be seen if other automakers will follow suit.
Hyundai Assurance is getting a lot of media buzz, but that may be the extent of the program's value. A closer look at the program's details reveals:
1. Cars must be financed through the Hyundai dealer.
2. The program only covers the first 12 months of the loan period. If someone falls on hard times after 28 months, for example, Hyundai Assurance does not cover non-payment.
It is unfortunate Hyundai feels the best way to differentiate itself is by offering a walk away option to new buyers. While consumers have a variety of criteria they consider when buying a car, the ability to walk away from a loan is probably not going to be weighted with great importance. This promotion is weak and walks the line between being sensitive to the financial dilemmas of consumers and playing on their fears.