The crumbling auto industry is doing whatever it takes to entice nervous buyers including removing the burden of a car payment if a consumer should lose his or her job.
Ray Wertz, editor-in-chief of auto blog Jalopnik.com, spoke to us from the New York Auto Show to explain the various auto assistance programs that have hit the market since the beginning of the economic crisis. There are two types of assistance plans being offered right now, Wertz said. The first, Negative Equity Coverage, allows you to be forgiven up to a certain amount of money you still owe on your car. The second, Payment Assistance, stipulates that the maker of the car will either take over your payment for a period of time or pay back the lender should you lose your job.
Comparing Plans: Hyundai Assurance, GM Total Confidence and Ford Advantage
Negative Equity Coverage:
-Hyundai Assurance: Covers up to $7500. For example, if you buy a Hyundai Accent for $5600 you can trade it back and you don’t have to make any more payments.
-GM Total Confidence: Will cover you up to $5000 but only if you plan on trading your GM vehicle in for another GM. For example, if you have a Cadillac Escalade and you owe $35,000 but the car is only valued at $28,000 GM will make up for the $5000 difference.
-Ford Advantage: No Negative Equity Coverage
(Hyundai is the best Negative Equity deal, according to Wertz.)
Payment Assistance:
-Hyundai Assurance: Covers up to three months of loan repayment or lease payments. No monthly maximum. So if you owe $7000 a month on a Genesis coupe you’re set.
-GM Total Confidence: Covers up to nine months of payments but with a $500 monthly maximum.
-Ford Advantage: Covers up to 12 months of payments with a monthly maximum for $700, which comes to $8400 for the year.
(Ford Advantage is the best Payment Assitance plan, Wertz said.)
Special Note: Hyundai Assurance plan is offered through Dec. 2009. GM is offered through April 2009 and covers people within the first 24 months. Ford offers this plan through June 1, 2009.
Best Overall Plan: Hyundai Assurance. It offers the greatest flexibility and does not require you to purchase a new car. But Ford's Advantage plan is a close runner up, in Wertz's opinion.