Buffalo Trace

Buffalo Trace
From a few years ago, me mugging with the bronze buffalo sculpture at Buffalo Trace Distillery in Kentucky.

Monday, June 6, 2011

Hyundai's Guaranteed Resale Value = A Win for You!



Ahead in the game by 21 points at the start of the second half, and Hyundai tosses up a Hail Mary.

What in the wide, wide world of sports is going on?

Making a formal announcement on April 20, Hyundai established the all-new Hyundai Assurance Trade-In Value Guarantee.

With an eye on minimizing customer worries about depreciation, the program in a nutshell provides owners with a guaranteed value for their new vehicles in months 24 through 48 of ownership if traded in on a new Hyundai.

The guarantee applies to any new Hyundai purchased on May 1, 2011 or later.

At trade-in, the owner will receive the higher of the assessed value or the guaranteed value of a qualifying Hyundai.

A few mouse-print stipulations are tossed in for good measure, like the owner must be able to show proof of the scheduled maintenance having been performed at a Hyundai dealership; but generally the whole thing appears fairly straightforward.

I am stumped by Hyundai's motives. Typically this is the sort of ploy a struggling auto maker might concoct out of desperation.

Around 2000 or 2001, Mitsubishi was suffering lackluster sales. Some over-paid marketing genius came up with the bright idea to goose sales by offering "Zero down, zero payments and zero interest for a year."

What could possibly go wrong?

Buyers were stacked up four deep in Mitsubishi showrooms and two years later files of defaulted loans were piled four-feet high on the credit manager's desk.

Mitsubishi in 2000 was desperate; Hyundai today, not so much.

These guys are having a great year!

Sales for Hyundai's best April ever were up 40% over the same month last year; while sales for the first four months of 2011 are up 31% over 2010.

What is Hyundai's motivation for shouldering what could be a very expensive experiment?

I suspect it is simply to turn up the heat on the competition. Nothing else makes much sense.

But whatever Hyundai's reasoning, the guarantee seems to have no down side for you.

Short of Hyundai going under, no matter what the market does, the owner is covered.

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