Mega Used Car Dealership Offers Financing to Potentially Unemployeed

The nation’s largest used car dealer, AutoNation, is adopting a Hyundai Assurance like program that alleviates some of the uncertainty people are having about their jobs. Hyundai pioneered a program that would let laid off consumers to return a car back to the manufacturer within the first 12 months of ownership, provided three months of payments were made first and a maximum of $7,500 in losses were covered.

The AutoNation program will do something similar. Under their program, monthly car payments up to $500 will be covered for six months if the buyer becomes unemployed. The buyer must at least make the first three payments; the offer expires within 12 months of purchase, and the insurance only covers up to $3,000 in losses. The other big difference is that the Hyundai program doesn’t hurt one’s credit. The AutoNation program can negatively affect one’s credit if, after six months, the person still cannot make payments.

What’s interesting about all of this is that even used car dealers are realizing the impact the original idea from Hyundai is having on the American psyche. So, why not help used car shoppers by easing their confidence issues?

I’m beginning to wonder if this isn’t the new way to buy any car? Also, the bigger question is does this type of program bring more buyers into market? Or is it just helping usurp buyers from other brands in the existing market? My guess is that it is bringing more buyers into the market, as there are probably a lot of potential sales sitting on the sidelines as people assess how severe the downturn will be.

The good news is that the stock market is thinking it may have hit bottom last week and Ben Bernanke’s recent interview on 60 Minutes gave the nation a relief when he said the recession would end in 2009. All of this is helping to build confidence and programs like Hyundai’s and AutoNations’s are just helping bringing people back into market earlier as they are able to worry less about job security in the near term.

Luxury Certified Pre-Owned Sales Up! (really)

From the Wall Street Journal, Sales of Used Luxury Cars Rise: “Demand for used luxury cars is remarkably strong compared to the wilting new vehicle market. The trends suggest affluent car buyers aren't paralyzed. But they are searching for a new balance between saving money and hanging on to the lifestyle to which they became accustomed in better times.”

Picking up a used luxury car is a good idea in today’s market where Used Exotics are Going for Honda Accord Money.

So who is pushing certified pre-owned (CPO) in their marketing? BMW, who is mentioned in the article, is running a promotion for 0.9% financing. Lexus is doing a 2.9% promotion n the RX model. Other brands are also providing financing incentives across their CPO fleet.

I did a quick survey to see how the luxury brands promote CPO on their homepages. Of luxury brands in the USA, 77% have CPO links on their main navigation. Some brands make it a bit more difficult to locate pre-owned models. Mercedes-Benz is one who does not include a link to CPO from their main navigation; though, they do promote the content using a link from the main image on the homepage (it’s a simple small-font text link.)

Bentley actually makes the most prominent promotion of their used-vehicle offerings. There are two prominent access points to used car listings. Bentley suffered a new vehicle sales drop of 20% for all of 2008, so moving product, even used is imperative to keep sales going in this economy.