GM, Ford take Hyundai-style approach to job loss protection plans
April 1, 2009 by Matt Brogan
In the US today both GM and Ford have taken the lead of rival Hyundai in offering to make car payments for buyers who lose their jobs.
GM said it would provide payment protection (up to nine payments of $500 for new car buyers) for two years as part of its GM Total Confidence program whilst Ford unveiled its Ford Advantage plan which will cover payments for up to 12 months.
The efforts are aimed at easing buyers’ concerns as the US recession continues.
GM’s US sales have fallen 51.1 per cent this year (through February), and Ford’s are down 45.9 per cent from year-earlier levels.
The schemes follow Hyundai, which introduced its Hyundai Assurance plan in January, and have since that time posted a 4.9 per cent sales increase.
Initially, Hyundai allowed customers to return vehicles without damaging their credit. Since then, the automaker temporarily expanded the program to include up to three months of payments.
No tags for this post.“Hyundai has had great success getting buyers into showrooms with this kind of message, and it is certainly not unusual for automakers to copy each other’s successful strategies,” Edmunds’ AutoObserver.com Editor Michelle Krebs said. “Now, the pressure is on the other imports that have been watching Hyundai’s success and now are seeing Ford and GM rising to the occasion.”
This is the first time i have heard of this. Sounds like a great idea. But could it have the same fate that caused the global credit crisis. Bringing car buyers forward into a market they might not be able to afford to be in? After 12 months will the yards be filling up with cars they can not sell.
Surely such a scheme would be covered by a higher interest rate or higher fees??????
The commomwealth bank is offering a similar scheme where they will suspend your payments if you lose your job. The catch is you will still be slugged with interest.
Everybody pays in the end and nothing is for free