Hyundai Assurance program unused by owners so far
Hyundai has scored a big marketing win with its incentive program that allows owners to return a new Hyundai within a year if they lose their job. Called the Hyundai Assurance program, the South Korean automaker sweetened the deal later by offering to pay up to three months of car payments before taking the car back so that owners would have time to look for a new job. While the rest of the auto industry has been hit with slumping sales in 2009, Hyundai sales were up in January and about even in February compared with 2008. Some of that certainly has to do with the peace of mind provided by the Hyundai Assurance program.
But an incentive program isn't successful just because it sells more vehicles. The value of the incentive to the automaker goes down the more it cuts into the profit of each vehicle sold. So how much has the Hyundai Assurance plan cost so far? Aside from a few marketing dollars to get the word out – nothing. That's because despite selling 55,133 vehicles through the end of February, not a single owner has taken Hyundai up on its offer to buy back their vehicle. So, at this point, the incentive program has been a home run idea that's sold more cars but effectively cost Hyundai nothing. Of course, that could all change if within the next year our economy turns into Great Depression II and Hyundai owners begin returning their vehicles en masse. Until then, however, Hyundai will likely continue to enjoy a better sales performance each month than its competition.
Follow the jump for a poll on the effectiveness of Hyundai's Assurance program.
[Source: Kicking Tires]
Reader Comments (Page 1 of 2)
BigWill 6:23PM (3/25/2009)
It's amazing that no one is stepping up to challenge Hyundai on this. The AutoNation program covers 6 months of unemployment but they won't take the car back, which means the owner is stuck with responsibility for the negative equity.
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Franz 6:54PM (3/25/2009)
Well, considering that people would actually have to lose their income first in order to take Hyundai up on the offer, I'd think that most people are trying their hardest not to find themselves in that position. It's not surprising at all.
BigWill 9:23PM (3/25/2009)
I said "challenge" them, as in "compete" which is what AutoNation is sort of doing. It's something that looks good, doesn't cost a lot, and seems to be generating a bunch of good will for Hyundai. Seems like a no-brainer - which is probably why Detroit won't do it.
Franz 10:40PM (3/25/2009)
Oh, I misunderstood your post. My bad.
Bill E 6:25PM (3/25/2009)
We'll see how many people take up the offer when FY09 ends.
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alex 6:27PM (3/25/2009)
doesn't the program require that you have the car for at least 3 months before they will take it back?
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rlioz11 6:35PM (3/25/2009)
Actually, Hyundai's program is "powered by Walkaway", which offers this kind of insurance for pretty much any car, through dealers. Hyundai does indeed have to pay for the program, since they're basically throwing in free finance insurance for their buyers. The real winner here is Walkaway USA, which is apparently making out like a bandit. Oh, and according to AN, at least two buyers have turned their cars in as of 2/16: https://home.autonews.com/clickshare/readLink.do?CSAuthKey=SthhyZ8pRco-oBxiurSLvPY-0
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hyundaifans.com 6:35PM (3/25/2009)
Score one for the marketing genius who came up with this.
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superman211 6:51PM (3/25/2009)
FAIL!
elprogramer 6:44PM (3/25/2009)
I want to say it's a gamble, but credit's so tight that the people who would use this service are excluded from getting a loan in the first place. But, there's always a danger that it could seriously hurt the company, just like Toyota's "saved by zero".
Still, I think more of the sales are due to their new "halo" cars and the prominent advertising they bought for the Super Bowl.
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BigWill 9:45PM (3/25/2009)
It's highly unlikely this program will hurt Hyundai because they've basically bought insurance to cover any take backs.
Also, Hyundai controls their own finance company. At the moment in addition to the Assurance Plan they're offering $750 bonus cash incentives for financing through HMFC on all Hyundais except the Genesis Coupe.
Nude Love 7:59PM (3/28/2009)
I don't get it.
If you don't have a really stable job, why buy a new Hyundai, anyway?
Or better yet, in these crazy economic times, why buy a new car?
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caddy-v 6:55PM (3/25/2009)
Just wait. Rumor has it the several hundred that are going to turn theirs in will do so just as soon as AAA shows up to get them started.
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jsjs 8:52PM (3/25/2009)
Methinks you've mistaken Hyundai for VW.
Tony 10:22PM (3/25/2009)
Caddilac would never offer this deal to it's prospective owners as they still operate on PT Barnum's premise that "A sucker is born every minute". The Caddilac 8-6-4, Cimmaron and all 80's Caddilacs , Catera bring back any memories.
caddy-v 4:56PM (3/26/2009)
Tony, since you like to play with the wayback machine, I suppose you don't care to remember the first and second generation Hyundai's that were beaten in quality by none other than Yugo?
I am Rich 7:30PM (3/25/2009)
Does it cover if you wake up one day and say to yourself, "I bought a Hyundai? What the HELL was I thinking?!?!"
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Auari 7:48PM (3/25/2009)
Well Rich, Not all of us are rich.
jsjs 8:54PM (3/25/2009)
Make that Land Rover and then you'd be on the mark.
Holden Miecranc 9:41PM (3/25/2009)
Only if that Hyundai is a Tucson.