By Althea Chang
With U.S. automakers on the edge of bankruptcy, now is actually a buyer's market if you’re looking to get a new car.
But with unemployment on the rise, many would-be buyers are hesitating. They're nervous about owing car payments if they suddenly find themselves out of work.
Taking note of the anxiety in the air, Ford (Stock Quote: F) and General Motors (Stock Quote: GM) have introduced programs, in competition with Hyundai’s Assurance plan, that cover your car payments if you lose your job. Here's a rundown of the three programs:
Under Hyundai’s Assurance Plus program, if you lose your income, the company will cover your payments for three months. If that’s not enough, you can return your car without damaging your credit.
The Assurance Plus program is available until the end of April. It's an extension of the original Assurance program, which applies to any new Hyundai model financed or leased through any bank, credit union or Hyundai Motor Finance Company, for up to one year after your purchase and as long as you’ve made at least two monthly payments.
You're eligible if you’re involuntary unemployed or disabled, if you declare self-employment bankruptcy, if you’re transferred to work outside of the country and in certain other conditions. Just be sure to ask about it, as the offer is only valid at participating dealers.
GM Payment Protection
GM will cover payments of up to $500 a month for nine months if you lose your job due to economic reasons during the first two years you owned your GM vehicle. This only applies if you financed or leased a 2008, 2009 or 2010 model (except for Saab vehicles and medium-duty and heavy-duty trucks.)
Under GM’s Payment Protection Program, you have to have been employed for at least 30 hours per week for 90 days after you initially bought or leased the vehicle and for 12 consecutive weeks prior to unemployment. And in order to take advantage of the plan, you have to wait 30 days after you’re officially unemployed to qualify.
You’ll also have to show that you’re eligible for unemployment benefits, that you’re not disabled due to sickness or accidental bodily injury, you’re not self employed and you don’t own more than 10% of the company that you’re employed by. Other reasons that you might not qualify: You’ve altered your initial purchase agreement or you knew of impending layoffs when you bought your car.
The Ford Advantage Plan, offers 0% financing on Ford vehicles through Ford Motor Credit, and will cover payments of up to $700 a month for up to 12 months if customers lose their jobs. The Ford Advantage Plan is available through June 1, and includes all Ford, Lincoln and Mercury vehicles.
The Fine Print
In order to qualify for GM and Ford’s payment protection programs, you have to have lost your job as a result of the economic downturn, and your might be subject to certain requirements on your prior employment status and duration of employment.
Although Ford covers a longer amount of time and would be especially helpful for the newly laid off, Hyundai’s Assurance plan has fewer rules and allows you to return the car without damaging your credit.
But with any of the plans, be sure to consult your dealer for details and other fine print. And once next year’s tax season rolls around, you may be subject to federal, state, or local taxes on any payments made on your behalf.
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