"GM Total Confidence," a 24-month customer protection package that will make up to nine payments for up to $500 per month for new car buyers who may become unemployed.
Hoping to assure reluctant motorists staying out of the new car market – or simply avoiding General Motors vehicles – GM has launched its expansive Total Confidence Program which, among other things, will protect buyers who unexpectedly lose their jobs.
The new program, announced during the first news conference by new GM CEO Fritz Henderson, offers to cover up to $4,500 in payments should a buyer lose his or her job, and even come up with some cash if a potential customer is “upside-down,” owing more money on their old vehicle than it would bring as a trade-in.
“This is about providing a full range of protection for our customers,” said Henderson, insisting the Total Confidence Program is more expansive than competitive measures launched by competitors, such as the Hyundai Assurance Program, which allows a buyer to return a vehicle, without penalty, if they lose their job.
The TCP program is GM’s latest response to the overall slide in U.S. new car sales and to the specific downturn it has faced as buyers grow wary about dealing with a manufacturer that could soon go bankrupt. On Monday, Pres. Barack Obama warned that a Chapter 11 filing was a very real possibility, as he rejected GM’s bid for a second round of emergency government loans.
At the same time, the president announced the creation of a new program designed to ensure that buyers of GM and Chrysler vehicles would receive promised warranty coverage. The program requires the two troubled makers to cover 15 % of projected warranty costs, while the U.S. Treasury would pump 110 % of the forecasted costs into a special insurance program.
Even with that new program, industry analysts, like Joe Phillippi, of AutoTrends Consulting, warn that buyers may steer clear of GM and Chrysler. How much of an impact buyer concerns about GM’s future might be having is unclear, but the automaker’s sales have steadily diminished in sync with news coverage of its problems. Last month, volumes were off 53 % compared to year-earlier levels.
“The traditional levers” used to revive sales “didn’t work,” according to Mark LaNeve, GM’s sales and marketing director, so it asked consumers for guidance and found that factors like job security are more important than ever.
Under the new program, GM will cover up to nine car payments, each for up to $500, if a buyer loses their job during the first 24 months of ownership. The buyer must have made at least three payments already, and must then be eligible for state unemployment coverage.
Also part of the program, GM will cover up to $5,000 in losses should a buyer be upside-down, owing up to that amount more, for the loan on a trade-in, than the vehicle would bring in resale.
Meanwhile, GM vehicles will receive 5-year/100,000 mile powertrain warranty coverage, and get a free year of the OnStar emergency assistance program.
The program will run through April 30, according to LaNeve, “and we will extend it if it’s successful.”
Hyundai Motor America CEO John Krafcik tells TheDetroitBureau.com that he believes the Hyundai Assurance Program has boosted sales by at least 10 %. Hyundai is one of the few makers to score a sales increase, so far this year. That’s triggering other auto manufacturers to consider adding job protection programs. Ford Motor Co. launched its own assurance program, today.