Vehicle Return Rides Into Powersports

The executive behind Hyundai’s launch of its payment-assurance program called the media attention it received “unparalleled.” A Florida auto dealer who has been in business for 45 years said the publicity Hyundai received was like nothing he’d ever seen. Luckily, that very same program is now making its way into the powersports industry.

Although the F&I industry has occasionally generated headlines in major news media outlets, never has it drawn the type of attention the Hyundai Assurance Program garnered. In a little more than two months, a Jan. 6 post on YouTube of Hyundai’s commercial received more than 106,000 hits.

And according to online automotive information resource Edmunds.com, page views on the automaker’s Website jumped 27 percent the day after it aired the Hyundai Assurance Program commercial during the 81st Academy Awards on Jan. 22.

“The guy that quarterbacked the launch of the Hyundai program came from Ford. He was there during the Firestone debacle, and he said the media attention the program received blows even that away,” said Jeff Beaver, a senior marketing executive for EFG Companies, which operates as the U.S. distributor of the WALKAWAY program.

“We also have a dealer down in Florida, Rick Case,” Beaver continued. “He has a CD with seven or eight clips of him on TV talking about the program. Even he said, ‘I’ve been in the car business for 45 years and I’ve never seen anything like this.’”

Four Years in the Making

WALKAWAY USA is the creator of the payment-assurance program, and EFG’s efforts to introduce it to the U.S. marketplace is a story of how to get the planets to align.

After signing a licensing agreement with WALKAWAY Canada in 2005, the program spent the next three years being piloted in select markets and retooled before Hyundai’s Jan. 2, 2009, launch of the program. Amazingly, EFG Companies rolled the product out the same month U.S. sales would hit their lowest point in 27 years. The only bright spot was Hyundai.

“We launched WALKAWAY in 2005, and over the course of 2007 and part of 2008 we revamped the program,” said Ricky Wolfe, president of business development for EFG Companies. “We wanted to be conservative and very targeted with our rollout.”

Now the company is bringing the program to powersports, a market Beaver and Wolfe said is primed for such a product.

“When Hyundai conducted its focus groups, they asked participants what it was like for them in this current economic crisis. They all said it was a scary time,” Wolfe recalled. “So imagine what that means for powersports. You have to have a car, but you don’t need to have a motorcycle. That’s why we think this could be a tremendous tool for the powersports industry.”

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Powersports Goes Live

Although Beaver and Wolfe said a Phoenix dealer was the first to offer the product, the first two dealers to officially announce the program are based in Minnesota — St. Paul Harley-Davidson/Buell in St. Paul, and Wild Prairie Harley-Davidson/Buell in Eden Prairie.

The two dealerships issued a joint release on Feb. 12 announcing the one-year complimentary package, called the Pledge. Like Hyundai’s program, it covers the motorcycle owner in case of job loss or certain life-altering circumstances, allowing a customer to walk away from up to $7,500 in negative equity without negatively impacting his or her credit status.

“Life these days is tough, and it’s only getting more and more complicated,” stated Kurt Harder, COO of St. Paul Harley-Davidson/Buell, in the company’s press release. “With the Pledge and WALKAWAY, our customers no longer need to feel tentative about their motorcycle purchasing decisions.”

The two dealers placed the program on the seats of every new and used Harley-Davidson or Buell motorcycle purchased and financed at either dealership, making it available to every customer regardless of age, health or employment history.

And although WALKAWAY sounds and feels like an F&I product, Wolfe and Beaver said its true intent was to be a sales generator. Even so, the program’s upgrades make for a nice upsell opportunity in the F&I office. The program also steers customers toward dealership financing by requiring that customers finance through the dealership to be eligible.

“We’re a performance-enhancement company and we’ve made this transition from being F&I-only to differentiate us from other companies like ours,” said Wolfe. “We just thought we needed to play sideline to sideline, so we made some strategic moves in terms of buying a CRM company, buying the licensing to WALKAWAY Canada, which we thought at the time was a tremendous lead-generation tool. That’s the way we’ve seen it all along.”

Wolfe said the 12-month, complimentary vehicle-return program represents the lead-generation part of the program. From there, a customer can be sold on several upgrades, including full-term coverage, additional coverage for other out-of-work circumstances, and up to $15,000 in negative equity coverage.

In fact, the two Minnesota Harley-Davidson dealers offer an enhanced level of the Pledge program, which allows owners to extend their coverage for up to 84 months on a maximum loan of $50,000.

“The feedback we’ve received on the motorcycle program has been pretty good,” said Wolfe. “After coming out of training for the two Phoenix dealers we turned on in January, our agent told us they gave him a standing ovation.”

Beaver said the powersports version of the program was designed for the high-end luxury motorcycle category, such as Harley-Davidson and Victory class motorcycles. He added that an Asian motorcycle maker is also in talks with WALKAWAY, and hinted at the possible expansion of the program to other powersports categories. Much of that will depend not only on how receptive dealers and customers are, but lenders as well.

“Interestingly enough, the local and regional financial institutions, banks and credit unions have been very receptive to the program,” said Beaver. “The national banks, historically, have been hesitant, but with today’s economic conditions, there’s a much greater receptiveness to the concept of the program.

“The higher-end bikes are where we thought it should start. We’ll see how things go before we expand.”

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Program Highlights

NAME: WALKAWAY

DESCRIPTION: WALKAWAY is a 12-month, complimentary vehicle-return program offered to anyone who finances or leases a new or used vehicle. It provides up to $7,500 of coverage for financial shortfalls should any of the following circumstances arises:

• Involuntary unemployment

• Physical and mental disability

• Critical illness

• Loss of driver’s license due to medical impairment

• Self-employed personal bankruptcy

• International employment transfer

• Temporary job loss

• Accidental death