CAR PAYMENT GUARANTEE from AutoNation

Las Vegas, NV— AutoNation, the largest automobile retailer in the US announces “AutoNation Payment Protection.”  YOUR $500.00 car payment guarantee, however, it is only available as a TEST MARKET program at this time. Only the AutoNation car dealerships in Florida, most known as Maroone, are participating, including the Lexus of Palm Beach and Mercedes stores.

Here is what we know about the program AutoNation is offering; “The AutoNation Payment Protection program is being offered at no charge with purchases of new and used vehicles and is also available on leased vehicles. To qualify, a person must have made at least three monthly payments, lost their job involuntarily, and applied for state unemployment. If a person still cannot make the payments after the six month grace period, the dealer will buy the car back at its market value. The customer would be responsible for any negative equity.”   Note: If your payment is over $500.00, you make-up the difference to keep driving the car. What if you regain your job or find new employment before the end of the six month guarantee period? You go back to making the payments as usual, and AutoNation doesn’t charge you back or stick the payments they made on the back-end of the contract. Now that’s sweet.

I asked a sales manager at an AutoNation dealership in the test market if this program was based on MSRP, list price, no-negotiation deals, and he said absolutely NOT. “We do business as usual, negotiate in good faith, sell the car and give the client peace of mind.” And they put the deal on the AutoNation full disclosure payment proposal, which shows all the fancy number play in stereo; six payment/ lease options with or without the extended service contract, GAP and aftermarket stuff listed along side the post- reconditioning value of your trade-in.  The only thing AutoNation hasn’t thought of on their Purchase Proposal is how to show the 2009 auto sales tax deduction as a plus on the trade side. (poke)

Consumer Mary B. asked me a question yet to be answered, “What if you lose your second job, which was crucial for qualification at the point of loan origination, and will they pay in this scenario? Or do you have to lose both jobs to qualify? (Maybe someone from AN will respond or comment on this post if they are following me ;-)?)

The AutoNation Payment Protection program is set to last 12 months, but I am sure as soon as the Mr. Maroone, the CEO of AutoNation, can figure out the cost factor to rolling it out nationally, other AutoNation dealers around the country will be all over it.  Mom and Pop dealerships responded with “read the fine print” and “another gimmick” retorts to the latest salvo from AutoNation, but most industry watchers applauded the effort which follows the success of Hyundai’s Assurance program. Launched late last year, Hyundai sales buoyed 25% in February over January and showed a 1.5% loss from same sales figures from the year before.  It will be interesting to see if AutoNation stock reflects this aggressive marketing approach which will be difficult for other dealership networks to afford. Will General Motors, Chrysler or Ford jump on the payment program? I’m sure many independent dealers will be calling their regional brand managers on Monday to pressure their manufacturers to fight back as prime selling season quickly approaches.

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