Lost Your Job? Hyundai Will Take Back Your New Car!

Hoping to move some inventory in 2009, Hyundai is offering to take back your new car if you lose your job or declare bankruptcy within one year of purchase. That’s right, you can return a new car the same way you’d return a sweater to the Gap, and without the fear of it negatively impacting your credit rating. The carmaker’s plan to forgive loans is the boldest move an automaker has come up with to combat guarded consumer-spending habits since the credit crunch and recession began.

Hyundai’s “Assurance” program is available on all new cars sold and leased through Hyundai financing, and is open to everyone, regardless of age, health or employment. In addition, the carmaker will accept new car returns in the case of physical disability, accidental death, loss of license for medical reasons or international job transfers. Hyundai will also cover up to $7,500 in negative equity. You’ll only owe what you did before the qualifying event occurred.

In an era that’s seeing hundreds of thousands of jobs slashed every month and the most jobs lost in the fourth quarter since World War II, people are afraid to saddle themselves with additional debt.1 But for many, owning a reliable vehicle is critical to earning a living at all.

The car conundrum is just another example of the recession’s grip on Americans. Economists agree the single-biggest recession trap is the lack of consumer spending. But spending money on a non-necessity is a scary prospect for people who don’t know if they can afford next month’s mortgage payment. It’s the ultimate “Catch-22″.

That’s why the Assurance program is such a breath of fresh air. Consumers can take the risk, spend money and hopefully spark auto sales, all with the security of a safety net should the bottom fall out.  Perhaps this initiative, coupled with current low gas prices, will crack the ice on consumer spending. And anything to spark spending is a move in the right direction to help America pull out of a recession that seems to have no end in sight.

Footnotes

1 “Carnage continues with 524,000 jobs lost in Dec. Unemployment rate rises to 7.2%, the highest in 16 years,” MarketWatch, Jan. 9, 2008

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