Report: Hyundai Will Guarantee Trade-In Value on Cars

[AF News Desk]

It seems the folks over at Hyundai have decided to offer another quality-assurance option in the form guaranteed trade-in value on new car purchases - so long as you trade in the vehicle between the second and fourth years of ownership.

Here's the story from AutoNews:

Originally Posted by Ryan Beene, Automotive News - 4/20/11

NEW YORK – Starting May 1, Hyundai Motor Co. will guarantee the future trade-in value of its new vehicles.

When a consumer buys a new vehicle from a Hyundai dealership, the company will guarantee what the trade-in value of that vehicle will be after the second full year of ownership through the fourth year.

To qualify for the guaranteed trade-in value, customers must show proof that they have completed all factory-recommended vehicle maintenance at a Hyundai dealership.

The program, called Hyundai Assurance Trade-in Value Guarantee, will base the future trade in values on residual values set by Automotive Lease Guide.

"Depreciation is the single highest cost of car ownership," Hyundai CEO John Krafcik said in a statement. "While Hyundai's depreciation is now among the lowest in the industry, Assurance will remove many of the barriers and concerns about vehicle ownership."

The program's launch comes after Hyundai last month ended the Hyundai Assurance provision that allowed customers to return a new vehicle if they lose their job. The job-loss protection package was used to launch Hyundai Assurance in 2009.

The promotion proved to be a major marketing coup in the industry, and Ford and General Motors quickly copied it.

Through March, Hyundai sales were up 28 percent from the same period in 2010 to 142,620 vehicles.

For dealers, the requirement that customers prove they've serviced their cars at Hyundai dealerships could help improve service retention, an area in which Hyundai dealers significantly trail top-flight competitors such as Honda, Toyota and Ford.

Dave Zuchowski, Hyundai's U.S. sales boss, said in March that the brand's roughly 50 percent absorption rate – the percentage of a dealership's overhead covered by gross profit from service and parts business – was well behind that of its competitors, which in some cases have absorption rates of more than 80 percent.
You can reach Ryan Beene at rbeene@crain.com.

Read more: http://www.autonews.com/apps/pbcs.dl...#ixzz1KACeXO6A

Subaru has a similar program for guaranteeing trade-in value and GM attempted to implement one in past years. The question is, do you believe this is something that can benefit both the company and the consumer or do you think this is bound to be a program laden with specific requirements to take advantage of it?

[speediva]

This is a pretty bold move... I wonder if this will hold true or if people will be put off by the time limitations?

I remember the Subaru price guarantee was a JOKE... their promised trade-in price on my Forester was UNDER KBB!!!! Like I was going to get myself back into a monthly car payment with a horrible trade-in value.

Plus, I remember having a "price lock guarantee" on gas from BP during the Katrina disaster, and that lasted less than 12 hours...

[makeni]

Both cars looked very nice. But I like Hyundai especially the small version of the cars. I just wish Hyundai's offer is not too good to be true.

[wallacengineering]

This is good news! I have always thought Hyundai had the best value for your money in vehicles, as well. The 2012 Accent is supposed to get 30 City/ 40 Highway MPG while having 20% more power than the second in it's class, as well as having plenty of key features to help improve driving comfort and luxury as standard. On top of all of this, with the full high-end luxury package installed, it is the cheapest, most-efficient, fastest, and most loaded vehicle in it's class and about $3000 lower than it's next competitor. I think Hyundai is going to make it's way past the big names soon, such as Toyota and Honda, as long as they prove reliable.

[michelleon]

Hyundai has best cars and people like to use Hyundai's cars because of many reasons like it gives very low maintenance and they can afford accessories for this cars. It has very wide collection of cars, so people can select anyone from those cars.

[supra123]

Very interesting move indeed.May be this move will keep them ahead of their competitors and might urge other company to come out with similar kind of offers in the future.

[jamesslcx]

I think this is a good thing for Hyundai owners and the company. They are selling great cars and peace of mind to along with the deal.

[HimgiriGurgaon]

Hyundai is considered to be the best brand to take up these kind of nice moves. This is the best part of Hyundai....