No Way - Hyundai!

Here's another ridiculous "bail-out" offer. Hyundai has announced they will allow buy a new car and then return their Hyundai vehicle if they experience "an involuntary loss of income", i.e., lose their job within 12 months of purchasing one of their ten new vehicles.

Just a few details. Hyundai will absorb up to $7500 in negative equity for buyers who walk away from their loans. Let's see - the MSRP on a basic Sonata sedan is $24,050. So if a year from now you turn that baby back in, they may decide it's worth only $12,050 - which is about what a year old Sonata is selling for now. If you had paid $2000 in payments during that year, and they absorb the $7500 "negative equity," you would still owe $2500. And now you have no car and bad credit.

I've got a better idea:

1. Pay cash for your car.
2. Start your own business. Be like Hugh Jackman's character in Australia - "No one hires me, no one fires me."

Here's a 1998 Mercury Mystique I purchased recently to help one of Joanne's young friends who is just making a new start. It's flawless inside and out - cold air, great mechanical records. I paid $800 and then another $330 for new tires.

Why would a person put themselves in a position of double jeopardy: a job that may not last and a car where you know you owe more than it's worth from day one. There are better options.

Tags: Hyundai, australia, business, car, job

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Comment by Mike Mitchell on January 20, 2009 at 6:57am: Dan, what if you implemented Hyundai strategy with your own products which in my opinion are appreciating assets. Your returns are already much lower than the industry standard so it could be a clever win-win!

Comment by Paul Giganti on January 19, 2009 at 8:02pm: A few others mentioned this was a great marketing ploy, maybe it is, maybe its not, I am beginning to think its just more fluff or worse a "sub prime" auto loan scam.

Comment by Dan Miller on January 18, 2009 at 4:41pm: Randy -- I actually bought this car from a dealer friend. It's the 9th car I've purchased from him. He knew what I was going to do with it. This was a trade-in that he didn't particularly want in his inventory -- so he let me have it for what he had allowed on the trade. But I do buy from eBay, repo sales, and just anywhere I see a deal. If you aren't desperate, but are ready at any time, it's amazing the deals that are out there.

Comment by Randy Linder on January 18, 2009 at 4:37pm: I greatly admire you and your wife's interest in this young lady's life. Way to go! I told my wife the other day we are "wanna-be gonna-bes". We wanna and someday are gonna be the givers as we often see in the examples around us, much like you and your wife. This is one of the top things that keeps driving me to find that passion and success in life, to be able to be a blessing to others.

So where'd you find the car, Dan? Ebay? Craigslist? I'm in search myself right now. Where would you suggest looking for a good used car?

Comment by Joanne Miller on January 18, 2009 at 2:31pm: You certainly know my feelings on this..........anyone who buys a new car is just nuts. Soon as it is driven off the lot it starts depriciating so rapidly there is no way to recoup the loss. One benefit of an economic recession is that it helps people to be more aware of how their money is spent and that is a very good thing! I take being a good steward of our money very seriously.

Comment by Jay Peroni on January 18, 2009 at 2:07pm: Like Sean, I agree it's a brilliant marketing strategy compared to say GM and Ford though I question it's practical business application. I have found whenever you give others a "escape clause", many take advantage of your generous policies. The bigger question is: will the "gimmick" bring in more sales to make up for those who will "exploit" the loophole and those who genuinely take advantage of a down circumstance? I would like to think that the executives at Hyundai thought this through. However given the track record of the auto industry, I'm not convinced.

Dan, marketing strategies aside, your message is dead on! When we put our destiny in God's hands and our abilities there is a much greater probability of success. Pay cash for a car and start your own business - seems risky, yet that is how many of the wealthiest people in the world became rich. By not relying on the government, their company, and others, they find ways to create value for others. When you truly deliver a product or service that helps others and people are willing to pay for, there's no such thing as a recession in your household!

Comment by Sean McCool on January 18, 2009 at 11:07am: Dan,

I agree with you life lesson, but you have to admit, it's a brilliant marketing strategy.

Comment by Theresa on January 18, 2009 at 10:53am: Awwwwwwwwww.....Those two are just GLOWING!!!! (Might it be because she has no car payments?) ;)

Wonderful post as usual, Dan....