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Quick Hits: Hyundai Sweetens Pot for Unemployed, Recently Deceased


Brief scrutiny of today's headlines.

Hyundai hopes to woo jumpy consumers with an unusual incentive plan.

The automaker will cover up to $7,500 in negative equity on the lease or purchase of one of its vehicles if a buyer becomes unemployed or dies.

Here's how the incentive program works: If the buyer has a $20,000 loan on a vehicle that's currently worth $10,000, the automaker will cover $7,500 of the $10,000 liability. The program is limited to the first 12 months of ownership, and the buyer must make at least 2 payments on the loan or lease to qualify.

If Hyundai's program is successful, look for another round of incentive wars among the world's automakers. That would be good news for prospective buyers, but would erode automakers' earnings during a worldwide sales slump.

Hyundai's incentive program underscores how desperate automakers are for a sale - any sale. But is the program enough to trump the outstanding quality of Toyota (TM) or Honda (HMC) or the gas-electric hybrid technology offered by a brand-new Ford (F) Focus?

Probably not. In any case, most prospective buyers with shaky job prospects would probably prefer to hang on to their cash. So Hyundai may grab some attention, but the plan probably won't do much for sales - or the bottom line.
No positions in stocks mentioned.
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