Hyundai: Buyer's Recourse

Hyundai Motor America seems to have tapped a nerve among nervous car buyers.

As Peter Valdes-Dapena reported this week on CNNMoney.com, the carmaker had a hugely successful January. The apparent reason? A new program that allows buyers to return their cars without financial penalty if they get laid off after they buy their Hyundai. While car sales plummeted 37% industry-wide from year-ago figures, Hyundai's sales were up more than 14% over last year.

Under the "Hyundai Assurance" program launched in January, people who buy or lease a car from Hyundai can return the car within a year if they experience "involuntary unemployement," become physically disabled or endure certain other setbacks. Any losses in the car's value, up to $7,500, will be covered. People's credit rating won't be damaged if they take advantage of the offer, reports Valdes-Dapena.

And as part of the "Hyundai Assurance Plus" program announced earlier this week, Hyundai will also cover three months' worth of payments for customers who are laid off or suffer a physical disability. Again, the program, running through the end of April, is good for the first year you own or lease your car. Read more about it at its official site.

Other car companies could copy the promotion. And why not? It addresses one of the key fears holding people back from making big-ticket purchases these days: the prospect that their job will be pulled out from under them, and they won't be able to find a new one.

So for a short time, some of that risk is offloaded onto Walkaway USA, the company that's actually offering the program on behalf of Hyundai. One hopes they have properly gauged the risk of how many Hyundai customers might be returning their cars in a worst-case scenario. Because, as we all know all too well from the mortgage market, sometimes very smart businesspeople don't do quite the best job of forecasting just how bad worst-case scenarios can be. "We feel very confident about the program's structure," responds Jeff Beaver, senior vice president of marketing and product management for EFG Companies, the parent company of Walkaway USA. He says there's more than an eight-year history of this type of program, mostly in Canada. "We rely on a strong actuarial analysis by our underwriting partner," he says. "We are constantly evaluating current market conditions and will make adjustments if necessary," he says.