Following the trend started by Hyundai Motor Co., and even going one better, automakers Ford are offering a bailout of their own: buy any new car from them between April 1st, and April 30th, and if you get pink-slipped GM will pay your car tab for up to 9 months and up to $500.00; Ford will pay up to $700.00.
But wait! There’s more: If you buy a car, drive it, make payments on it, and then bring it back for a trade-in, GM will credit you for what you own on the car, even if the National Automobile Dealers Association says the value is lower. You also get free On-Star service and a host of other little perks (including a low finance rate).
If you’re looking for a catch, there really isn’t one. So long as the buyer is employed at the time of purchase and the lay-off notice does not pre-date the car purchase (and the employee is not self-employed), the companies are ready to deal.
A similar program was offered by Hyundai this February wherein new car buyers could return their vehicles to Hyundai without further payments due in the event they were laid off within the first year of the purchase. Of course, Hyundai was footing the bill for its promotion: (and getting back the car). In the case of Ford and GM, the tax papers appear to be subsidizing the purchases.
Practice Note: Clients who wish to do “big splash” promotions should remember to review carefully all of the terms and conditions of the promotion, to make certain there are no ways for participants to take advantage of the program. Of primary importance is the institution of an “end date,” so that if there is a problem, the promotion has a limited life. Similarly, for a promotion such as this, there should be a limit on the number of cars one person can purchase. Provisions should be placed in the terms and conditions of the promotion that make clear the program will not be offered if, in the sole discretion of the sponsor, a person is trying to deliberately undermine the intent of the promotion.