Hyundai has a new program aimed at getting shoppers who are worried about their future back into the showroom and it is called Hyundai Assurance.
The current economic climate
Unless you’ve been living in a cave for the past six months, you know that the auto industry is currently under siege. Here at Auto Credit Express Car Loans, we need look no further than the December and final yearly sales figures from all the manufacturers to see the results of the financial crisis on new vehicle sales.
And while the credit markets seem to be thawing just a bit, new car sales will not recover until consumers feel a great deal more confidence in the economy in general and in their own financial stability in particular. This confidence, unfortunately, may be much slower to recover than the overall economy. Even with the infusion of tens of millions of dollars into the banking sector during the fourth quarter of 2008, the most recent University of Michigan Consumer Confidence Survey showed that a majority of consumers reported that their personal financial situation had worsened – hardly a good sign for the automotive retail sector.
To combat this market and to help allay consumer fears about job loss, Hyundai recently introduced the Hyundai Assurance program that lets you return your vehicle in case of, according to Hyundai, “certain life-altering circumstances.”
Here’s how it works: If you finance or lease a new Hyundai vehicle and experience one of 6 covered events, including job loss, within 12 months of purchase, you have the option to return your Hyundai and walk away from up to $7,500 of negative equity with no impact on your credit score. This coverage comes with no charges and you are qualified regardless of your age, health or employment history.
The 12-month policy covers the following qualifying events:
• Involuntary Unemployment
• Physical Disability
• Loss of Driver’s License due to Medical Impairment
• International Employment Transfer
• Self-Employed Personal Bankruptcy
• Accidental Death
Covered employment issues include termination (not resignation), job loss due to a move by the employer and co-signed loans if the primary borrower suffers a job loss. International employment transfers are also covered as a transfer to any country other than the United States is considered “international.”
Disability events include work loss due to physical disability, while the medical impairment example used is loss of vision due to pre-existing diabetes.
According to Hyundai, if you follow the correct procedures outlined in the program (call or email the Assurance Administrator, supply the necessary documents, have your vehicle appraised at a Hyundai dealer), the return of a vehicle resulting from a paid (and approved) benefit is considered an early pay-out of the loan or lease and is not considered a voluntary repossession and will not impact your credit rating “in any way”, according to Hyundai.
As far as we can tell, there are really two main limitations to the program – time frame and negative equity. Buyers are, unfortunately, covered for only the first year of the loan. Once that time has expired, you’re in the same situation you would’ve been in without the coverage. The second issue, negative equity, needs to be examined from the perspective of your own personal situation. If you are rolling in negative equity from a previous car loan, or if the vehicle you are buying is one of the more expensive models, $7,500 may not cover the negative equity during the first 12 months of the loan. In this case, you would have to come up with any additional funds to cover the entire amount in order to qualify for the buy-out.
The Bottom Line
Here at Auto Credit Express Car Loans, we think that Hyundai’s Assurance Plan is probably the most innovative program we’ve seen in a long time. The marketing people at Hyundai are to be congratulated on their creativity in coming up with this kind of a program – especially considering the current economic conditions.
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