Hyundai Motor Co. announced a new incentive plan Monday that would allow buyers to break contracts and return vehicles if they lose their job or income.
The program is the latest effort to win over jittery consumers as industry sales hit a two-decade low. The South Korean company is offering to cover up to $7,500 in negative equity on the lease or purchase of one of its cars or trucks.
To qualify for the giveback program, Hyundai owners must have made two scheduled payments on their loan or lease. The program covers the first 12 months of ownership.
“That’s a new one,” said Erich Merkle, an industry analyst with consulting firm Crowe Horwath in Grand Rapids, Mich. “It’s an indication of the very tough sales environment right now.”
According to a Hyundai, buyers can return a vehicle for no additional charge within 12 months of purchase if any of the following occur:
—Involuntary unemployment
—Physical disability
—Loss of driver’s license for medical reasons
—Job transfer overseas
—Personal bankruptcy filing by a self-employed worker
—Accidental death
“We understand consumers’ hesitance to commit to large purchases in today’s economic environment,” John Krafcik, acting CEO of Fountain Valley-based Hyundai Motor America, said in a statement.
While the shortage of credit for auto loans has gotten much of the blame for the plunge in sales, rising corporate layoffs and plummeting consumer confidence have also played a major role. That has spooked consumers and turned showrooms into ghost towns.
“People who are already laid off aren’t buying new cars anyway,” Merkle said. “The real hurdle for automakers is that a lot of people who are still employed are delaying purchases because of uncertainty about losing their jobs. [Hyundai] is trying to remove that uncertainty.”
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