GM, Ford are latest offering help to those hit by job loss
— -- General Motors and Ford Motor joined Hyundai Tuesday in offering forgiveness plans to counter potential buyers' worry about making new car payments if they lose their jobs.
Each of the automakers contracts with a third party to insure the protection.
Hyundai's plan, which also allows the car to be returned, appears to have helped sell cars. Sales were up 4.9% in the first two months of the year for the seventh-largest automaker. The top six, GM and Ford included, saw big drops.
The plans:
•GM. If you lease or own a new vehicle at least 90 days and lose your job, GM Total Confidence will make payments up to $500 for up to nine months.
GM also will cover consumers for up to $5,000 if their vehicle is worth less in two years than they owe and they want to trade it in on a new GM vehicle.
•Ford. Buyers of Fords, Lincolns or Mercurys have to have made payments for at least a month, then the Ford Advantage Plan will make payments of up to $700 a month for up to 12 months in case of a job loss. Ford workers are eligible.
•Hyundai. The South Korean automaker gives payment relief for up to 90 days besides allowing no-penalty return of vehicles for those who are suddenly jobless.
The plans are a sign of the times. Non-farm unemployment rose to 8.1% in February, up from 7.6% in January, the government reported.
The best plan for most buyers appears to be GM's, says Jesse Toprak, sales analyst for car research site Edmunds.com. "They not only cover the job-loss issue but the negative-equity (resale value) issue."
He likes Hyundai's return policy, however. With GM or Ford, "It is still your problem."
Beyond car manufacturers, some of the nation's savviest marketers have figured out that the best way to get folks who fear job loss to spend money is to promise them a rebate, refund or special deal if they are laid off shortly after the purchase.
Related Stories
ABC News Live