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March 31st, 2009

Keeping Up With the Automotive “Joneses”

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In an attempt to not be outdone by their competitors, GM and Ford announced a consumer incentive today designed to cover their customers’ car payments if they lose their job. The American automakers are taking a cue from similar, ongoing incentives like Hyundai’s “Assurance Plus” program and AutoNation’s “Payment Protection” program.

The “Ford Advantage Plan,” which runs through June 1, is structured to cover payments of up to $700 a month for up to one year. GM’s incentive which runs through April 30 covers payments of up to $500 a month for nine months.

As the title of this post suggests, GM and Ford are a step behind on this advertising trend designed to jump-start sales. Why would GM announce a similar incentive that runs a month shorter and covers less payment, for less time, hours after Ford did the same? Why not make it better? Perhaps it’s a question of financial inabilities, but this is another perfect example of why GM is currently failing to keep up with the competition, even when some of the competition is behind the eight ball to begin with.

Furthermore, both of these programs are lacking Hyundai’s promise that consumers can return their vehicle within a year of purchase without any damage to their credit. While small in comparison to GM and Ford, Hyundai is standing tall over the two in terms of auto sales:

South Korea’s Hyundai Motor Co has outperformed almost all major automakers in the U.S. market so far this year, helped by a program launched in January that allows customers to return vehicles if they lose their jobs within the first year of the purchase.

GM’s U.S. sales tumbled 51 percent and Ford’s U.S. sales were down 44 percent in the first two months of 2009, compared to a market that declined 39 percent overall.

Hyundai’s sales rose 5 percent over the period.

Readers: Are the American automakers a little too late? If you were able to buy a new vehicle, which type of automaker would you buy from — domestic or foreign? Are these incentives enough to entice your business?

Visit The Consumerist to view Ford’s President Mark Fields talk about his “Advantage Plan.”

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About the HSH Blog

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

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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