Financing
Playing it Safe with Auto Buyer Protection Programs
Auto buyer protection programs have been introduced by many automakers and dealers over the last few months in an effort to increase showroom traffic and reassure buyers that their auto financing will be protected should they lose their source of income.
An auto buyer protection program, which may be offered by either an automaker or a dealer, is essentially an insurance policy that covers your auto loan payments, for a specific length of time, in the event that you lose your job. Although the details of auto buyer protection programs differ from one automaker or dealer to the next, they are all designed to do one thing: protect your credit score by covering your auto financing plan.
For example, Hyundai’s Assurance Program is designed to cover a buyer’s car payments for up to three months or grant the buyer the option of walking away from the loan, regardless of what is owed on the vehicle; Ford Motor’s Advantage Plan is designed to cover payments of up to $700 a month for up to 12 months; and GM’s Total Confidence Program is designed to cover payments of up to $500 a month for up to nine months.
For consumers who want to buy a car but have fears of defaulting on their auto loan (and wrecking their credit score) should they lose their job, auto buyer protection programs may be the catalyst they need to move forward with a car purchase.
It is important to understand, however, that an auto buyer protection program will not likely cover the cost of your auto financing indefinitely. In other words, if you are unable to secure employment after the program’s completion, you will be responsible for covering your car payments once again.
If you have put off financing a car because of concerns over the fragility of the economy and your job security, then you may want to consider the peace of mind that an auto buyer protection program offers.
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