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Car Shoppers Rank Most Motivating Financial Guarantees

April 01, 2009

IRVINE, Calif. — No-fault return and

assisted/deferred payment programs ranked highest as the reasons for motivating

new-car shoppers to purchase vehicles, according to a Kelley Blue Book survey.

In light of the current economic crisis and auto industry

turmoil, consumers recently shared their opinions in the Kelley Blue Book

Market Research survey of which auto manufacturer financial assurance/guarantee

programs they found most motivating to buying a new car.

When new-car shoppers were asked how motivated they would be

to purchase a vehicle if a manufacturer offered one of the following guarantee

options in the event they were facing a job loss or other serious financial

challenges, new-car shoppers say they are most motivated by a no-fault return

option (76 percent).

The second most popular plans include payment assistance

(where a manufacturer covers payments on the car-buyers' behalf for a specified

period of time) at 75 percent, and deferred payments up to six months without

penalties (also at 75 percent).

Less popular options include a trade-down plan (ability to

trade-down to a cheaper/smaller vehicle to reduce payments) at 63 percent, and

a gradual payment ladder (lowered payments for the first few months, working up

to full payment amount over time) at 49 percent.

Hyundai

announced a program earlier this year (Hyundai

Assurance Program), which successfully increased consumer confidence and

spurred new-car sales. Additionally, Hyundai traffic on kbb.com spiked 35

percent the week the program was announced. Taking into consideration consumer

opinions, similar programs were announced this week by Ford (Ford

Advantage Plan) and General

Motors (GM

Total Confidence).

"Taking the risk out of car-buying right now is the key

to getting consumers back into dealerships," said Paul Johnson, president

and chief executive officer of Kelley Blue Book and kbb.com. "These new

assurances offered by the domestic auto manufacturers, new tax incentives and

government-backed warranties, as well as our President's promise that he will

'not let our auto industry simply vanish,' should allay fears, diminish the

risk and hopefully get shoppers to once again reconsider domestic

vehicles."

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