In a program that starts on May 1, the future trade-in value of Hyundai Motor Co.’s new vehicles will be guaranteed by the company. Called Hyundai Assurance Trade-in Value Guarantee, this program will base the future trade in values on residual values set by Automotive Lease Guide. Hyundai will guarantee what the trade-in value of its vehicle will be after the second full year of ownership through the fourth year.
So that consumers can qualify for the guaranteed trade-in value, they have to show proof that they have accomplished all factory-recommended vehicle maintenance at a Hyundai dealership.
In a statement, Hyundai CEO John Krafcik said, “Depreciation is the single highest cost of car ownership." He explained that even as Hyundai’s depreciation is already one of the lowest in the industry, Assurance will take away many of the obstacles and worries about owning a vehicle. This program was launched just as Hyundai had ended the Hyundai Assurance provision that gave customers the chance to return a vehicle if they lose their jobs.
In 2009, the job-loss protection package in the Hyundai Assurance program proved to be a huge hit. Ford and General Motors wasted no time and swiftly copied the offering. Hyundai sales grew by 28% from the same period in 2010 to 142,620 vehicles.
Dealers will find that requiring customers to prove that they’ve had their cars serviced at Hyundai dealerships will help boost service retention, an area where Hyundai dealers considerably fall behind top-flight competitors like Honda, Toyota and Ford.
Last March, Dave Zuchowski, Hyundai's U.S. sales boss, said that the brand's 50% absorption rate (the percentage of a dealership's overhead covered by gross profit from service and parts business) is behind some of its rivals, which in some cases have absorption rates of over 80%.