For Struggling Car Owners, Hyundai Offers Lifeline Carmaker Hyundai has announced a program for those customers who can no longer make their payments because of circumstances beyond their control. Hyundai Motor America acting President and CEO John Krafcik talks about the Hyundai Assurance Program.
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For Struggling Car Owners, Hyundai Offers Lifeline

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For Struggling Car Owners, Hyundai Offers Lifeline

For Struggling Car Owners, Hyundai Offers Lifeline

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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This is All Things Considered from NPR News. I'm Melissa Block.


And I'm Michele Norris. It's no secret the bad economy has sent vehicle sales plunging. For Hyundai, based in South Korea, sales dropped 14 percent in 2008 compared to 2007. So now, Hyundai is gambling that in these hard times, a new ad campaign might help.

(Soundbite of Hyundai Assurance Program advertisement)

Unidentified Announcer: A decade ago, Hyundai gave people confidence with America's best warranty. Today, we're providing another kind of confidence. Buy any new Hyundai and if in the next year you lose your income, we'll let you return it. That's the Hyundai assurance. We're all in this together, and we'll all get through it together.

NORRIS: Now, as always, there is fine print in the deal, but you don't have to squint. We've got John Krafcik, the acting president and CEO of Hyundai Motor America, to help explain that. He joins us from Fountain Valley, California. It's so good to talk to you.

Mr. JOHN KRAFCIK (Acting President & CEO, Hyundai Motor America): Great to be here, Michele.

NORRIS: Now, you're calling this offer the Hyundai Assurance. Give us the basics. I can return the car if...

Mr. KRAFCIK: Well, it's basically a complimentary vehicle return program. If within the first year of purchase you have an involuntary loss of income, we'll take the car back. Pretty simple.

NORRIS: There have to be, though, some qualifications here. Any loss of income?

Mr. KRAFCIK: Yeah, if it's - so if you quit your job, we don't cover you for that one. But you know, if you're laid off, if your job causes you to relocate to another country, we cover that as well - those kinds of involuntary loss of income, yeah.

NORRIS: Has anyone ever done anything like this before with a purchase this large?

Mr. KRAFCIK: Michele, as far as we know, we're the first automaker to have a program like this one that actually allows you to return the car with very few questions asked within the 12 - first 12 months of ownership.

NORRIS: Twelve months. So it's up to one year.

Mr. KRAFCIK: Up to one year, yeah.

NORRIS: Now, this is interesting because the moment - if you purchase a car, the moment that you drive it off the lot, it immediately loses value. Are the owners on the hook for all that lost equity?

Mr. KRAFCIK: That's essentially what we're covering, is up to the first $7,500 of vehicle equity. So, a consumer buys a $20,000 car. If within the first year they return it and the value of the car is determined to be $12,500 or more, that whole difference will be covered by Hyundai. If the value of the car after one year is determined to be $12,000, then the consumer would be responsible for the $500 extra.

NORRIS: So it sounds like you are signed on. You thought this was a good idea. Were the accountants or the bean counters within the company worried about this, worried that Hyundai might take a bath?

Mr. KRAFCIK: You know, we're - as far as the U.S. market goes, we're a fairly small player. We've got a 3 percent market share - although interestingly, that makes us the seventh biggest brand in the U.S. But we're still small enough to be pretty nimble. And we very quickly rallied around this idea and had it in market January 2nd. And I have to say, Michele, we had pretty strong support throughout the company.

NORRIS: Mr. Krafcik, are you at all worried that this ad, while interesting - certainly would get a customer's attention - might also smack of desperation that buyers might think, whoa, Hyundai must really be in trouble. I'm not sure that I want to purchase one of their vehicles.

Mr. KRAFCIK: Well, actually, I think we think of it as a way to differentiate ourselves. You've probably heard this definition of insanity - if you keep doing the same thing that you've always done and expect a different result. We wanted to try a different kind of program that seemed to address people's fears during these uncertain times. And what we like about assurance is it goes right after that concern that folks have. And so far, it's still early days. We're only three or four days into the program. But the response we've had from consumers, from dealers, has shown the program's resonating for us.

NORRIS: Well, John Krafcik, it's been good to talk to you. Thanks so much.

Mr. KRAFCIK: Thanks, Michele.

NORRIS: John Krafcik is acting president and CEO of Hyundai Motor America.

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