No Way — Hyundai!

Here’s another ridiculous “bail-out” offer.  Hyundai has announced they will allow a customer to buy a new car and then return their Hyundai vehicle if they experience “an involuntary loss of income”, i.e., lose their job within 12 months of purchasing one of their ten new vehicles.

Just a few details.  Hyundai will absorb up to $7500 in negative equity for buyers who walk away from their loans.  Let’s see – the MSRP on a basic Sonata sedan is $24,050.  So if a year from now you turn that baby back in, they may decide it’s worth only $12,050 – which is about what a year old Sonata is selling for now.  If you had paid $2000 in payments during that year, and they absorb the $7500 “negative equity,” you would still owe $2500.  And now you have no car and bad credit.

I’ve got a better idea:

  • 1. Pay cash for your car.
  • 2. Start your own business. Be like Hugh Jackman’s character in Australia“No one hires me, no one fires me.”

Here’s a 1998 Mercury Mystique I purchased recently to help one of Joanne’s young friends who is just making a new start.  It’s flawless inside and out – cold air, great mechanical records.  I paid $800 and then another $330 for new tires.

                               catherines-car-21

Why would a person put themselves in a position of double jeopardy:  a job that may not last and a car where you know you owe more than it’s worth from day one.  There are better options.

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14 Responses to “No Way — Hyundai!”

  1. Jeff Jones Says:

    Hey Dan,

    But what about that new car smell, Ha! You can buy that in a bottle. The problem in many situations is that so many people view a car as a status symbol rather than a mode of transportation It is a means of getting from point A to point B. The more money you pay for it, the nicer it is. But it is still transportation. Good word Dan, Thanks!

  2. Jay Peroni Says:

    Dan: you have to agree this is a brilliant marketing strategy compared to say GM and Ford. I do question it’s practical business application though. I have found whenever you give others an “escape clause”, many take advantage of your generous policies. The bigger question is: will the “gimmick” bring in more sales to make up for those who will “exploit” the loophole and those who genuinely take advantage of a down circumstance? I would like to think that the executives at Hyundai thought this through. However given the track record of the auto industry, I’m not convinced.

    Dan, marketing strategies aside, your message is dead on! When we put our destiny in God’s hands and our abilities there is a much greater probability of success. Pay cash for a car and start your own business – seems risky, yet that is how many of the wealthiest people in the world became rich. By not relying on the government, their company, and others, they find ways to create value for others. When you truly deliver a product or service that helps others and people are willing to pay for, there’s no such as a recession in your household!

    Jay Peroni, CFP
    Author of The Faith-Based Millionaire
    http://www.jayperoni.com

  3. Tawanda MDAWARIMA Says:

    Dan

    Jeff’s comment is enjoyable. The new car smell. There is again the issue that when buying pre-owned you may be buying someone else’s problems. I always swing between ecstasy and apprehension driving my pre-owned. Discovering new hidden problem now and again while basking from pride that by grace I got a bargain of style…

    It is important to keep in perspective that it is after all transportation, but with my german engineering I lok forward at any and every occasion to get behind that wheel and thank God with the foot on the gas. I dont get that feel when I switch to the other car I have to drive. The balance.

    From your contribution, I fully agree, some deals like that which sound right but get you into position of threat are not for the wise to fall into. Wisdom is getting a major discount by going pre-owned and praying God leads to one which is practically new and reduced simply because it is pre-owned.

  4. Shawn Frey Says:

    Well actually there are several ways to bottle the new car smell. Read more about it here http://en.wikipedia.org/wiki/New_car_smell

  5. kim Says:

    My husband and I were so excited to buy a “new-to-us” car this weekend. And for the first time, we paid cash for our car! It was hard to write out that check, but I believe we were more frugal in our shopping because of it & we even came in at $5,000 below what we had budgeted for the new car. We still got a great vehicle . . . a 2008 Dodge Grand Caravan, certified pre-owned. No better way to go, if you ask me!

    Thanks for the inspiration!

  6. Misty Says:

    This article made me laugh. 🙂 We’ve actually bought 2 brand new cars, so we know what people feel like when they possibly can’t make that payment. Desperate people do desperate things. So we finally learned from our mistakes and we bought a 1992 Land Cruiser with cash. We are very proud of ourselves. We’ve recently had to put some work into it but it’s so worth not having a car payment every month.
    Live like no one else, so that you can live like no one else. – Dave Ramsey

  7. Deborah Says:

    My husband and I also just bought a “new” vehicle. We paid cash for an amazing 2006 Honda Pilot. Every time I get in it I can’t believe it is paid for! What an empowering feeling to know–no car payments!

  8. Jody in Athens, AL Says:

    It may sound like they’re bailing you out but if you look a little deeper you see it for what it really is… an underhaded sales gimick! Really!!

  9. Jill (Kris's wife Says:

    Spot on.

    I am almost 60 years old and I have NEVER had a car payment. It was a great pleasure a few months ago to purchase my latest (1996 Toyota Camry) with cash pulled out of my jeans. No payments, no worries, and it is OK if I have a few issues. I will NEVER be a slave to lenders, because I wasn’t brought up like that and most of all, I value my freedom.

  10. allfromgrace Says:

    Car payments are the payday lender of the middle class. I made my last car payment in 1974 at 20 years of age. Ever since it has been cash only. I have bought a number of new cars and am now buying used cars. They are a much better deal. I work as an engineer in the automotive industry. Any car built in the last 10 years should be expected to last 200K miles with proper care and maintenance. Will you perhaps have to buy a rebuilt transmission for $2000? You might. That would be 4 months of $500 car payments. Big deal.

  11. DCon Says:

    Almost 10 years ago, my wife and I (married less than two years) were having vehicle problems. In desperation, we went to a new car dealer in Antioch (one that is no longer in business in this area, Thank God) and purchased a vehicle. That very night my wife was crying, sick to her stomach feeling that we had made a terible mistake, a commitment we could not afford. Going back the next day, we could not find the oh-so-friendly salesman who would do anything to get us into our new car. Instead, there was a sales manager who had all the look and charm of Jabba the Hutt. He was busy swearing at another customer who was in a similar predicament as we. Well, the dealer had already sold the note to a bank, and we were stuck with the car. We learned our lesson. Seven years later, when my wife wanted a particular SUV (used, of course), we saved up and dropped cash money for what she wanted. I cannot describe the feeling of freedom you get paying cash for a car and not having a two-ton car note around your neck.

  12. Elias Almas Says:

    How can I have car, as I am retired in Dec. 2001

  13. Deborah Says:

    You must have income of some kind. Just save for it.

  14. list my vehicle for sale Says:

    list my vehicle for sale…

    […]No Way — Hyundai! « Dan Miller’s Blog[…]…

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