Hyundai says Assurance program is effective
Hyundai's Assurance program, launched by the automaker in early January to give wary customers peace of mind if they lose their jobs during the first year of Hyundai ownership, appears to be working. According to the Korean automaker, the program is attracting shoppers. "We think it's responsible for a 10 to 15 percent incremental increase in interest," said John Krafcik, acting CEO of Hyundai Motor America.January sales numbers seem to support the automaker's claim. While nearly every other car manufacturer reported double-digit sales declines last month, Hyundai sales were up 14.3% compared to the same period last year. Krafcik credits the sales increase to the publicity surrounding the Genesis sedan being named the North American Car of the Year, and its unique Assurance program. Only two customers have returned cars under the program, and the automaker is committed to run it until the end of 2009... plenty of time to be applied towards a new Genesis Coupe which is scheduled to roll into showrooms later this month.
[Source: Automotive News - Sub. Req.]
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Reader Comments (Page 1 of 2)
jc 9:48AM (2/17/2009)
Brilliant campaign.
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Quattroporte 9:48AM (2/17/2009)
Hyundai up 14%, Chrysler down 55%. Seems like Chrysler should have done this instead of gas cards and a lifetime warranty.
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Brn 9:58AM (2/17/2009)
If Chrysler had done Assurance and Hyundai had done Lifetime Warranty, it wouldn't have mattered.
Quattroporte 10:14AM (2/17/2009)
@Brn
You're probably right, but I had to compare it to Chrysler's somewhat gimmicky incentives.
Dan 1:44PM (2/17/2009)
Chrysler HAS this exact same program, they have had it for years. I was offered it in 07, it was called Walkaway Protection, same thing the Hyundai one is called.
Hyundai didn't invent this, they copied it and just marketed it better.
Timsvtgen1 9:54AM (2/17/2009)
Isnt anyone looking at the down aspect of this? Totally destroying Hyundai's resale value even more... Its a threat of even more used Hyundai's at the auction, further driving the price down. This really is a great deal for the people that unload their car because they lost their job, however for the people that are lucky enough to keep their jobs and pay off or want to trade in their Hyundai, they will be hurt even more.
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Casper 9:57AM (2/17/2009)
I don't think Hyundai really cares about the their resale value, as much as surviving in a crappy market. This is good. It's not like everyone and their mother are going out to buy Hyundais.
Mike 10:25AM (2/17/2009)
those cars already have a very low resale value.
if you want to keep resale value, go get a hybrid. otherwise, fish from another boat.
Rick 10:54AM (2/17/2009)
From what I heard, it's a huge amount down and high credit score on 36 months, etc. So not just anyone can get this and I don't see how that would affect the resale value.
jsjs 2:05PM (2/17/2009)
Right, cause Pontiacs, Dodges, Nissans, Toyotas, etc. getting repo'd do so much for resale value.
It's a wash.
dkgfisc 6:48PM (2/17/2009)
Who says that many are coming back? Contrary to what Rick says, you can finance your car through any lender, so it's highly likely that some of the increase in sales is due to people who otherwise couldn't get financed now can since this is nothing more than $7,500 in gap insurance during the first year. That's the riskiest period for the lender from a depreciation standpoint, so it may well be that many of these people aren't in fear of losing their job, but have found it easier nonetheless in the current credit market to get financed for a new Hyundai due to the program.
skeptic 10:01AM (2/17/2009)
Obviously people are not thinking about the fact that they might still need a car to get to interviews and live daily life if they are unemployed.
A brilliant campaign which seems to prove that people still aren't really thinking things through.
In would think that it would be better to keep whatever car you are driving if you think that you might lose you job within a year.
Maybe this was mostly people who were coming off of a lease. Otherwise I don't think it is really a good idea.
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hyundaifans.com 10:01AM (2/17/2009)
I doubt Hyundai is going to get many returns on this deal. In lots of places where public transportation sucks, people will do whatever it takes to hang on to their cars. They will scrape the money together somehow. The program is a nice gimmick but a brilliant one as well.
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Wobbly_ears 10:53AM (2/17/2009)
I think there are a number of reasons why this seems to be working for Hyundai.
1. Their 10 yr/100k warranty program can not be discounted. In these uncertain times, people crave for security. The feeling of a factory warranty for 10 years is a very reassuring feeling. People feel that they might have to hold on to their cars longer & want those years to be as trouble-free as possible.
2. Unquestionably, Hyundai's improvement in quality & reliability reputation. These days, all their products are among the top 2 or 3 in the quality studies. And never discount the word of the mouth publicity from existing owners.
3. Many people think that this recession wouldn't last longer than a year. So, if they can survive the next one year, they would be alright. And the reassurance that they can toss the keys to Hyundai if they lose their jobs, is a big safety factor.
4. And, as usual Hyundai's have lower transaction values than other carmakers. Why would someone spend more money for a Toyota or Honda when they can get similar quality, better features & better warranty than them? Also, Hyundai dealers seem to be more 'hungry' than Honda or Toyota dealers (personal experience, YMMV)
No matter what the economy does, people still need to travel, drop kids etc. And people would hold on to their cars rather than homes during economic tough times. They have to, as much of the country doesn't have a public transportation system for people to be completely be able to ditch their cars.
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Menice 11:28AM (2/17/2009)
naysay'rs can say what you want.
once again, Hyundai continues to do all the right things...and continues to kick ass.
it's a shame the ignorance continues.
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another joel fan 9:25AM (2/18/2009)
Hyundai's quality continues to improve but they still lag in perception. The key thing they're trying to do is just get people to check out their cars. Once they see them up close, those perceptions start to change. Basically, I see this as a way to get people in the showroom to check them out. I have a 2008 Santa Fe and am thrilled with it. Excellent quality. I have seen a few Genesis sedans and they look terrific, quality-wise.
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havoc 12:00PM (2/17/2009)
what benefit do you get from this plan? the ability to walk away from your car (as the advertisment says).
but...
you lose any down payment, and monthly payment, and tax and fees and...
basically it's just a friendly alternative to a bank repo or a surrender. chances are that if you qualify for a loan on a new car (and it's a hyundai), then you prob already don't have anything to worry about (in this economic down-turn).
that or you paid cash anyway.
what will happen is people will take adavantage of this program and lose their cash in hand, in exchange for buying a car that they prob should have held off on.
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BigWill 12:46PM (2/17/2009)
Because there isn't such a thing as a "friendly" repo these days unless you've got equity in the car, and the majority of car buyers don't during the first year. If you don't have equity you're still liable for the difference between what you owe and what the repossessing bank gets for the car, plus all the fees. In this tight credit market, losing your upfront cash is the least of your problems. Let a repo and a judgment for the difference hit your credit report and you aren't anything on credit at a good interest rate anytime soon. With creditors doing periodic reviews of credit, you'll be screwed even further with credit card interest hikes, lower credit lines, or even closed accounts.
Eric Bandholz 12:38PM (2/17/2009)
In my eyes this is the beauty of a free market vs. a centrally planned gov't. When companies are not getting free handouts from the government they are forced to think outside the box to stay in business and succeed. Props to Hyundai. 10 Years ago I would never have considered them, now they've got a couple of products that are tops of my list.
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mdm-adph 1:29PM (2/17/2009)
Yeah... don't Korean carmakers get huge subsidies from their government?