GM, Ford Roll Out Plans to Make Your Car Payments

No doubt influenced by the strong sales figures posted by for the first month of 2009, and have unveiled their own versions of , in which manufacturers will make payments on new vehicle purchases in the event of a major life event, such as losing a job. Whereas Hyundai will also allow buyers to return their recent purchases without a negative credit impact, GM and Ford will only offer payment assistance.

"The biggest thing the country and consumers are ... grappling with these days is confidence," said Mark Fields, Ford's president of the Americas. "This program that we put in place is to take that (concern) and really give consumers some confidence."

The was unveiled online today in a multimedia advertising campaign that will cover print and television mediums in the coming weeks. In the event of involuntary unemployment between now and Jan 1, 2010, the program will cover purchase or lease payments up to $700 a month for a year. To qualify, purchasers must have at least 90 days of full-time employment prior to termination, and be unemployed for at least 30 days before applying for the benefits. The program is free and runs through June 1 for most every new Ford, or vehicle, with the 2010 / Hybrids and the models being the only exceptions. Other incentives such as zero-percent financing and cash back offers still apply.

General Motors on the other hand, sensing perhaps that a bankruptcy is indeed forthcoming, is offering long-term value protection as well as short-term payment assistance in what it's calling the plan.

"Our Total Confidence plan is an unprecedented offer that reinvents the ownership experience in an extremely positive way," said Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing.

Under GM's Payment Protection plan, the company pledges to make up to nine monthly payments of $500 or less -- either purchase or lease -- in the event of a job loss during the first two years of vehicle ownership. Beyond that, GM will also offer a type of gap insurance for new-car purchasers called the Value Protection Program. Should vehicle owners decide to sell or trade their vehicle but find they still owe more than the vehicle is worth, GM will cover the difference up to $5000 for trade-ins, or $2500 in private party sales. Both portions of the Total Confidence plan are free to GM new car buyers, and like Ford, it will run through June 1.

"GM Total Confidence provides comprehensive coverage for new vehicle owners -- from protecting their new vehicle investment to protecting their family's income," said LeNeve. "GM Total Confidence provides customers peace of mind in uncertain times."

GM's Total Confidence plan does come with quite a few strings attached, and it also leaves some key areas a bit vague on description. Medium and heavy-duty trucks as well as the entire Saab lineup are not eligible for either portion of the plan, nor are folks who receive a severance package with their pink slip. To receive payment assistance, purchasers must be employed full-time for the first 90 days and then be unemployed for at least 30 consecutive days before filing. Purchasers must also be receiving state unemployment benefits to qualify. Payment assistance will be available to purchasers who lose their job due to "economic conditions," which GM describes as "including but not limited to, lockouts, individual and mass layoffs, or loss of income due to business failure or bankruptcy." The plan specifically rules out job loss due to medical reasons, but leaves room for interpretation on a variety of other situations. As for the Value Protection portion of the plan, the loan cannot extend beyond 72 months, and owners must be at least halfway through the term with no late payments. Whether owners trade in or sell their vehicle, they must buy a new GM vehicle within a week of turning the deal if they want to receive benefits, and any amount received over $600 dollars will be subject to tax. Finally, GM employees -- who ironically are among those at the greatest risk of losing their jobs--are not eligible for either program.

Hyundai has found significant success with its Assurance Program. While most manufacturers experienced double-digit losses during the month of February, Hyundai's sales were off by only 1.5 percent. Along with Hyundai, GM and Ford also join AutoNation in offering some type of payment assistance guarantee to U.S. car shoppers.