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February 21st, 2009

Incentives Keep Demand High for Hyundai

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Hyundai’s “Assurance” program appealed to potential car buyers by offering them the option of returning their new vehicle within a year if they lost their job. The Korean automaker took the program one step further by introducing their “Assurance Plus” program –  offering to pay the loan or lease payment for 90 days while the car buyer looks for a new job. Consumers can still decide to return the car after the 90 days.

The added incentive will begin on Sunday when Hyundai will release a series of ads showcasing the program during the Oscars. While the “Assurance Plus” program will run through April, the original “Assurance” program will continue through the end of the year.

So far the program has helped keep Hyundai out of the red:

The auto industry’s U.S. sales in January were at the weakest monthly annualized rate in 27 years, but Hyundai saw demand rise 14%, a trend [vice president of marketing at Hyundai Motor America Joel] Ewanick, Ewanick partly credited to the Assurance program, which was launched in early January.

Perhaps the best aspect of the incentive is that:

There is no charge for the program, and a customer’s credit rating is not damaged in the event of a default because the vehicle’s return is treated as an early payoff.

Automakers take note: if you can prove to consumers that you’re willing to stand behind them, they’ll be more willing to stand behind you.

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3 Responses to “Incentives Keep Demand High for Hyundai”

  1. Mitch Says: February 21st, 2009 at 11:49 am

    Though I don’t drive a Hyundai, I did buy my wife one a few years ago. These folks seem to have gotten it right, and programs like this certainly put them ahead of everyone else. I’ve always viewed most service departments of car dealers as just south of being totally professional and fair, as their rates are easily higher than taking it elsewhere, but Hyundai has never treated my wife incorrectly, and it’s hard to beat 10 years, 100,000 miles, isn’t it? Great incentive program; this is how American car dealers need to start thinking.

  2. Paul Havemann Says: February 21st, 2009 at 6:18 pm

    And, of course, Hyundai makes cars that people want to buy: small, efficient, and affordable. GM and Chrysler and Ford focused on SUVs and big trucks which are none of those.

    It also hasn’t helped matters that American car makers have far higher labor costs than Hyundai and others. If I recall correctly, American car makers’ labor costs add several thousand dollars to the price of a car.

  3. zafir bin tarwazi Says: February 24th, 2009 at 10:02 am

    I can tell you that up here in the Tota Bora mountains we have always had very good luck with our Hyundai’s. And with the threat of the U.S. military getting tough we could indeed be out of a job. We appreciate Hyundai looking out for us here in Afghanistan.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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