Topic: Guaranteed Trade values from Hyundai

[sailor723]

It probably doesn't amount to much (and is almost certainly full of fine print) but it seems like really smart smart marketing.

http://www.theglobeandmail.com/report-on-business/hyundai-to-guarantee-trade-in-value-of-cars/article1993204/

[rrocket]

It will disappear within a year or so....just like their "job loss" protection scheme they had...

[mmret]

Well they kind of do this with the residual on a lease already....so just take that, set the gaurantee a bit lower, and you're not in terrible shape by any means.

[Giant Dwarf]

Is this a marketing-spurred initiative?  Of course... but it's a smart one.  With styling, performance and reliability concerns now alleviated, Hyundai's biggest brand obstacle is the perception of worrisome resale.  This is a great way to help fast-track better resale values in the minds of potential buyers. 

[JSCC]

Does anyone have a list of that projected guaranteed trade value?

[PJungnitsch]

Hyundai USA:



At the time of purchase, customers will be provided with an assessment of the vehicle’s future value for months 24 through 48, based on an independent source. This is the guaranteed value.

When customers return to purchase a new Hyundai during months 24 through 48 of ownership, they can trade-in their qualifying vehicle towards the purchase of a new Hyundai vehicle.

At the time of trade-in, the customer’s vehicle will be assessed to determine the current market value. This current market value will then be compared to the guaranteed value.

        -    If the vehicle is worth less than what we guaranteed, the customer will receive the higher guaranteed trade-in value amount, less any applicable mileage charges or damage costs.

        -    If the vehicle is worth more than what we guaranteed, the customer will receive the higher amount. Win-Win.

The higher of either the guaranteed value or the current market value can be applied to the purchase of a new Hyundai. The guaranteed value must be applied towards the purchase of a new Hyundai financed through Hyundai Motor Finance (HMF) and only when a customer shows proof of all required vehicle maintenance at authorized Hyundai dealerships.

http://www.hyundaiusa.com/assurance/trade-value.aspx

A bit like a lease, I guess:

'less any applicable mileage charges or damage costs.'

[articsteve]

The guaranteed value must be applied towards the purchase of a new Hyundai financed through Hyundai Motor Finance (HMF) and only when a customer shows proof of all required vehicle maintenance at authorized Hyundai dealerships.

 

[mmret]

The guaranteed value must be applied towards the purchase of a new Hyundai financed through Hyundai Motor Finance (HMF) and only when a customer shows proof of all required vehicle maintenance at authorized Hyundai dealerships.

 

Always a catch. Those residuals looked way too high.

[Jaeger]

The guaranteed value must be applied towards the purchase of a new Hyundai financed through Hyundai Motor Finance (HMF) and only when a customer shows proof of all required vehicle maintenance at authorized Hyundai dealerships.

 

Exactly, smart marketing - an incentive for the customer to keep everything in-house.  Doesn't amount to much in reality, but it sends a positive message.  People won't read the fine print first - but they will hear the message that "Hyundai guarantees trade-in value and no-one else does."  And that's the point.

Savvy move on their part, IMHO.  They are exposing themselves to no greater risk than on a lease (protecting the product by maintenance requirements and mileage limitations).  And of course, the trade-in guarantee only works if the customer is buying a new Hyundai - so it keeps that customer in the fold.  So the car is purchased from Hyundai ($$), serviced through Hyundai ($$$$), traded in to Hyundai with low miles and well maintained ($) against a new purchase from Hyundai ($$), which is financed through Hyundai ($$$).

GD got it right and said it better than I did.

Jaeger

[articsteve]

It's very short term thinking and will create much bad blood 2 to 4 years down the road.

1.   Obviously they intend on making up any loss on the trade thru captive financing otherwise why make it a stipulation    Returning customers will pay additional points guaranteed.  This will FREAK ppl out.  The response is what we all use: "It's not us, it's the credit ppl. They're not 100% happy with your credit score."

2.  "All required service and maintenance" : 2 year term not so bad, but over the course of 4 years Hyundai's maintenance schedule is demanding and unnecessary.  I can tell you with certainty that customers who trade every 2 to 4 years change the oil (MOSTLY on schedule), but that's it.  They DO NOT do all the brake services, tranny services, filters, etc.  That's why they are trading so often to avoid all that crap.

3.  Mileage limits.  Watch, it will be 12k miles per year.  PPL who trade after 4 years will be hit with a tire charge.  Just like a lease and they will HATE it. 

[Jaeger]

It's very short term thinking and will create much bad blood 2 to 4 years down the road.

1.   Obviously they intend on making up any loss on the trade thru captive financing otherwise why make it a stipulation    Returning customers will pay additional points guaranteed.  This will FREAK ppl out.  The response is what we all use: "It's not us, it's the credit ppl. They're not 100% happy with your credit score."

2.  "All required service and maintenance" : 2 year term not so bad, but over the course of 4 years Hyundai's maintenance schedule is demanding and unnecessary.  I can tell you with certainty that customers who trade every 2 to 4 years change the oil (MOSTLY on schedule), but that's it.  They DO NOT do all the brake services, tranny services, filters, etc.  That's why they are trading so often to avoid all that crap.

3.  Mileage limits.  Watch, it will be 12k miles per year.  PPL who trade after 4 years will be hit with a tire charge.  Just like a lease and they will HATE it. 

Well, I doubt any of your points 1-3 will come to pass, but neither of us know.

1.  I don't know what the financing rate at Hyundai will be in 3-4 years, but I have no reason to think they will be goucing buyers - they want to make a sale after all and p!ssing off the customer is not a good way to do that.

2. People lease vehicles for 3-4 years and are required to maintain them.

3. I don't have any reason to believe the mileage limits will be absurdly low. As it stands, if you try to trade in a car with bald tires it will be factored into the offer the dealer is willing to make. 

Jaeger

[Turbo Bob]

It's very short term thinking and will create much bad blood 2 to 4 years down the road.

1.   Obviously they intend on making up any loss on the trade thru captive financing otherwise why make it a stipulation    Returning customers will pay additional points guaranteed.  This will FREAK ppl out.  The response is what we all use: "It's not us, it's the credit ppl. They're not 100% happy with your credit score."

2.  "All required service and maintenance" : 2 year term not so bad, but over the course of 4 years Hyundai's maintenance schedule is demanding and unnecessary.  I can tell you with certainty that customers who trade every 2 to 4 years change the oil (MOSTLY on schedule), but that's it.  They DO NOT do all the brake services, tranny services, filters, etc.  That's why they are trading so often to avoid all that crap.

3.  Mileage limits.  Watch, it will be 12k miles per year.  PPL who trade after 4 years will be hit with a tire charge.  Just like a lease and they will HATE it. 

You're just scaremongering, to most people it seems like a good deal, especially those who don't really care about the details.  To the uninformed consumer it looks like free peace of mind, which is a selling point.  You can argue all you want about the negative effects but just watch as the sales go up.

[articsteve]

1.  I don't know what the financing rate at Hyundai will be in 3-4 years, but I have no reason to think they will be goucing buyers - they want to make a sale after all and p!ssing off the customer is not a good way to do that.

If they didn't intend on making up any shortfalls in the trade value they would NOT make financing the replacement MANDATORY.  You ppl are so inexperienced with respect to how the captive financing arms work the customers.  Only a small % of customers qualify for the subsidized rates.  The remainder settle for a higher rate and the majority are rejected. 

[rrocket]

1.  I don't know what the financing rate at Hyundai will be in 3-4 years, but I have no reason to think they will be goucing buyers - they want to make a sale after all and p!ssing off the customer is not a good way to do that.

If they didn't intend on making up any shortfalls in the trade value they would NOT make financing the replacement MANDATORY.  You ppl are so inexperienced with respect to how the captive financing arms work the customers.  Only a small % of customers qualify for the subsidized rates.  The remainder settle for a higher rate and the majority are rejected. 

Well most of us don't screw people work at car lots like you, Steve..........

[articsteve]

You can argue all you want about the negative effects but just watch as the sales go up.

Undoubtedly.  It's a short term strategy.  But once you start jacking customers around they're gone because in the end what drives sales is tangible incentives and this offer is loaded with bait and switch.  

[articsteve]

Well most of us don't screw people work at car lots like you, Steve..........

Providing transportation to one and all. 

[Jaeger]

You're just scaremongering, to most people it seems like a good deal, especially those who don't really care about the details.  To the uninformed consumer it looks like free peace of mind, which is a selling point.  You can argue all you want about the negative effects but just watch as the sales go up.

Correct on all points.

Jaeger

[Turbo Bob]

You can argue all you want about the negative effects but just watch as the sales go up.

Undoubtedly.  It's a short term strategy.  But once you start jacking customers around they're gone because in the end what drives sales is tangible incentives and this offer is loaded with bait and switch.  

Sounds like a terrible deal.

If you don't want a new Hyundai then you can sell for market rate.

If you do want a new Hyundai on finance then you can get higher than market rate.

Awful deal.

[articsteve]

If you do want a new Hyundai on finance then you can get higher than market rate.

Where the customers pays for the "guarantee" thru the new finance.

If it wasn't a bait and switch, the "guarantee" would still be on the table without the mandatory finance.

[Turbo Bob]

So what if they pay through new finance. Many manufacturers make a profit on finance, that's nothing new. You think the 7% rate for a Mustang is prime?

Why are you so bitter about Hyundai? They are just doing what everyone else is, but well.