Monday, May 25, 2009

"If You Lose Your Job, We'll Make Your Payments For You."

This is what auto companies are telling people nowadays in order to get them to buy new cars. Hyundai started it, and now Ford and GM have announced their own variations.

While Hyundai's walkaway program offers to absorb car payments for three months and will accept a returned car without any additional payment, Ford is offering to pay $700 a month up to one year and GM is offering to cover up to nine payments of $500 each.

This sounds like an interesting marketing strategy, and it may work somewhat to increase new car sales. However, it doesn't address one thing: It's still a better deal to buy a used car vs. a new car. That's the route that many people are taking, and therefore used car dealers are faring much better in this bad economy.

The U.S. government and automakers have to find a stronger incentive to get people to buy new vehicles. Perhaps, a drastic decrease in pricing, a "buy one get one" free special, a huge tax break, or even free mechanical services for a year.

Consumers are much smarter these days and much more economical than ever before. Put simple: Buying a new car at nearly double the cost but with free "job insurance", is not a better deal than paying half the price for a used car with no "job insurance".

1 comment:

  1. one would think the car companies would target the new reigning households - single parents. We're the majority and they are losing out on sales by not pushing the cars that we need that include the comfort of looking nice but resistance to the wear and tear of having children inside.

    (If you saw my interior detail bill you would understand.)

    Another off the wall idea would be to suggest to get rid of cars, the car companies would go into their used lease stocks and when consumers buy one new car they get a used one for free.

    A dealer down in Ohio tried that and it seemed quite successful but didn't last long because it was two new cars and people can barely afford a house let alone a Pacifica (which cost more than a house.)LOL

    Car companies need to synergize with other businesses. Working together would bring out more buyers.

    If I knew I was going to get Six months of gas, a nice hotel stay, a couple of months of free insurance paid for by them or coupons just for making payments on time, I might be tempted to take a look around and smell the new cars.

    Most Americans always want something for free and the car companies can capitalize on this if they look for the right opportunities and stop thinking they are alone in this mess.

    Sylvia Hubbard
    Author and Blogger Ranting from How To Love a black woman
    & a certifiable groupie from Motown