Tuesday, March 31, 2009

GM and Ford Jump on the Payment Bandwagon

Most of you probably saw the Hyundai Commitment commercials around Superbowl time, lose your job, Hyundai makes your payment for a few months while you look for a job, and if you can't? you can return your car* (minus depreciation etc.).

Well, Ford and GM have now jumped on the bandwagon.

I have mixed feelings about this.

Ford and GM have both jumped on the Hyundai coat tails.

"Lose your job? We'll make your note for you!"

Ford said Tuesday it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1.

GM's payment protection program is much like Hyundai's Assurance Program in that the automaker will cover your payments in the event that you lose your job. GM's program covers you for 24 months and will make up to nine payments valued at up to $500/month. According to GM, if you qualify for state unemployment benefits, you'll qualify for the payment protection to kick in.

Part of me thinks this is great and will help out lots of people, but the other part of me feels that those people that were that financially irresponsible to buy a car they couldn't afford, or didn't have a emergency fund to cover 6 or 8 months of living expenses (which includes your car note and mortgage) should let this be a good reminder of living beyond one's means.

Sure, when I replaced my 290,000 mile car 2 weeks ago, I really wanted something nice, a pre-owned Infiniti M, A V8 Genesis, Town Car, etc.

What did I settle on? A Good deal on a used reliable 4 door sedan. A Ford Five Hundred (which has been renamed Taurus in 2008). Why? The uncertain economy, I didn't want to drop 35 Grand (or even 20 grand these days) on a NEW car, and really folks, what do you need a car for? Basic transportation. In this case, to and from work. I got it with around 50,000 miles, and paid less than 1/3 of the sticker new. I'm familiar with the powertrain, familiar with the chassis, and it has good reliability ratings according to Consumer Reports, and Excellent Crash test ratings. Leather, Sunroof, 6 CD Changer, power everything and all wheel drive to boot. Has new tires and new pads and rotors all the way around. Maybe when things improve, I'll get something 'nicer', but for now, this is a pretty darn nice daily driver.

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