Which Automaker Has the Best Payment Protection Plan?

Everyone wants to sell you a new car these days, then make the payments for you.

Hyundai started it. The Korean company's Assurance Plus Plan promised that, if a buyer should lose their income, Hyundai would make three payments on the buyer's behalf, then allow the buyer to return the vehicle and walk away from the payment entirely if needed. The program appears to be a success, helping protect Hyundai from the poor sales seen by its rivals in recent months.

Now, two other automakers have followed suit. The Washington Post reports, "General Motors and Ford Motor unveiled job-loss protection plans yesterday, following the success" of Hyundai's program. "GM said it will make nine car payments of $500 each for customers who lose jobs. Ford is offering payments of up to $700 for 12 months."

There are, however, important differences between the programs.

First, of course there is the payment limit. Ford offers to cover payment up to $700, GM up to $500. Jalopnik notes, "Hyundai doesn't put a number value on the total amount they'll pay, only saying they'll cover up to 90 days of loan repayment or lease payments. If you have a three-month loan on a Genesis coupe for $7,000 a month you'll be in great shape. Otherwise, your $250 a month lease on a Sonata will net you just $750."

Autoblog, however, thinks the payment protection isn't the most important factor differentiating the plans. "Where each automaker differs is what's offered above and beyond payment protection. GM offers equity assistance, which that means if you've bought an eligible vehicle and made payments for at least half the life of your loan, the automaker will pay the difference between what you owe on the vehicle and its actual value when you decide to buy a new one." The negative equity credit is good for $2,500 if you sell the vehicle to a third party, or $5,000 if you trade it in for another GM car. Neither Ford nor Hyundai make a similar offer. Hyundai's program, however, "covers any negative equity accumulated up to $7,500 when you return a vehicle."

Jalopnik also sees another key differentiator: how to qualify for coverage. While Ford and GM both offer benefits only to those involuntarily unemployed, Hyundai offers payment protection for those unemployed or physically disabled, and "Hyundai's equity plan extends to those who lose their license, lose their job, are transferred internationally, face bankruptcy, have a sudden physical disability, or are accidentally killed."

Jalopnik concludes that Hyundai offers the best plan because Assurance Plus "is the only one offering negative equity coverage with real teeth."

Timing may also be an issue. The Post notes that Ford's plan applies to "customers who buy by June 1 and lose jobs in 2009. The GM plan is available for customers who buy any of its vehicles except Saab by April 30." Hyundai' offer extends throughout the 2009 calendar year.

If you're in the market for a new car, check out the US News rankings of this year's best cars as well as this month's best car deals.