Buyers need reassurance to return to dealerships

If there is a silver lining to the ongoing carnage in the auto industry, it lies in the more creative marketing efforts being deployed by the sharpest carmakers to pull buyers into showrooms.

Consumers stand to benefit as carmakers become more inventive and go beyond the traditional cash and low interest rate incentives. That said, it should be noted that incentives are now at record levels -- an average of $3,169 per vehicle.

There also is encouraging talk in Washington about a cash-for-clunkers program similar to those that have revived new car sales in several European markets. Buyers basically would be rewarded with a credit -- as much as $5,000 -- for turning in cars at least eight years old in return for buying a new vehicle. The details are still being debated by legislators, and there are questions over which vehicles would qualify.

Job loss protection is a winner

But it was Korean automaker Hyundai Motor Co., which took the first step to address U.S. consumers' most pressing concern about the collapsing economy; the fear of losing one's job.

Clearly people have been reluctant to commit to a vehicle purchase while worried about their employment prospects, on top of concerns about plunging home values and 401(k) investments. Hyundai responded earlier this year by launching its Assurance Program, which protects buyers who lose their jobs over a period of year from purchase, with lease or loan payments covered up to $7,500. Furthermore, Hyundai will take the vehicle back and ensure the buyer's credit rating is not adversely impacted.

Hyundai's U.S. chief, John Krafcik, has described the program as being part of a revolution that is sweeping the industry. And to judge by the popularity of the job loss protection scheme with the public, Krafcik is hardly exaggerating.

Hyundai's lead in this area has inspired others; both Ford Motor Co. and General Motors Corp. have followed suit with payment-protection programs of their own.

Ford's plan covers a 12-month period and takes care of up to 12 payments of $700, while GM's program extends for two years and up to nine $500 payments.

Dealers also are getting in on the act. Although the program does not cover Michigan yet, the country's largest dealer chain, AutoNation, is offering to cover up to six months' worth of payments over a year.

Another problem facing consumers -- owing more on a vehicle than it is worth -- is also being addressed by GM. The company is providing a certain amount of trade-in protection in this situation for customers with a GM vehicle.

Buyers need reassurance

Back at the government level, there is a move to allow vehicle buyers to deduct taxes on cars, light trucks, motor homes and motorcycles costing up $49,500.

It's another useful step in the direction of persuading consumers to move back into the market.

The fact is that the last six months has been a frightening experience for the average American, watching the financial world come apart at the seams.

What everybody needs now is reassurance that there is help at hand. And when it comes to buying a new vehicle, people are looking for more than the usual discounts and deals to make them feel confident.

That's why Hyundai's move to cover the threat of job loss has been so well received (and imitated) and why we need more thinking outside of the box by automakers to make us all feel more comfortable about buying cars again.

Car Culture John McCormick is a columnist for Autos Consumer and can be reached at john.mccormick@detnews.com">john.mccormick@detnews.com.