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Hyundai: Can't make car payments? Just return it
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NEW YORK - Can't make the payments on that new car you just bought? No problem — just return it free of charge.
At least that's the deal being offered by Hyundai Motor America. In a bid to woo skittish consumers, the South Korea-based automaker will cover the depreciation on any returned leased or financed vehicle for the first 12 months to those who find themselves unable to make their car payments.
"We're seeing people who are stuck," said Joel Ewanick, vice president marketing for Hyundai Motor America, in an interview. "Really they have a mental fatigue and they're really nervous about their long-term financial situation, so we started working on that side of it."
Deadbeats need not apply, however. The "Hyundai Assurance Program" only applies to customers stricken by misfortune outside of their control, such as losing their job, becoming disabled or losing their driver's license for medical reasons.
Customers must also have made at least two payments on the car already. In addition, Hyundai will only refund the depreciation on the returned car up to $7,500.
"For the normal person, this should cover any normal depreciation in the first year," Ewanick said.
After the first 12 months, customers have the option of extending the program for a fee through their dealership. Customers who pay cash for their car don't qualify for the program, Hyundai said.
Hyundai, which launched the program on Friday, said the program is aimed at consumers too nervous to spring for a new car in the difficult economy. The slump in consumer confidence has been one of the biggest factors behind the collapse in new vehicle sales in 2008.
For this reason, traditional incentive tactics, like low-interest financing or cash bonuses, have been much less effective in boosting sales recently, Ewanick said. Economic anxiety — rather than cost — has been the biggest factor holding consumers back from big-ticket purchases.
"This is a recession of fear, a recession of confidence," he said. "It's much more severe than what we saw in the early '90s."
Hyundai said Monday its December sales in the U.S. fell 48 percent to 24,037 from 46,487. Sales for all of 2008 declined 14 percent.
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