Hyundai Announces Trade-In Value Guarantee Program

With a marketing strategy that takes aim at concerns about depreciation--and to drive up new-car sales--Hyundai has announced a new trade-in program that offers buyers a guaranteed price for their new vehicle, if they trade it in for another Hyundai within two to four years. It's sort of a confidence-building measure, like the super-long warranties Hyundai started offering in 1999.

The guaranteed trade-in value will be determined by the Automotive Lease Guide (ALG) forecast of the vehicle's future value. Between two and four years after purchase, if customers want to trade in their current Hyundai for a new one they will receive at least what was originally guaranteed. If it's worth more at the time of trade-in, the customer will get the higher assessed price.

The program begins on or after May 1st and has no additional cost. It would most likely benefit people considering larger, more expensive vehicles, which tend to be more susceptible to price swings in a tough economy with roller-coaster gasoline prices.

The program carries two stipulations that could be possible deterrents to some customers: it requires that the vehicles be routinely serviced at Hyundai dealerships, and that the second vehicle be financed through Hyundai.

Just last month, Hyundai ended its job-loss protection program, which allowed car buyers to sell back their vehicle to Hyundai if they lost their job within the first two years after purchase. Hyundai continues to offer a longer-than-normal 5-year/60,000-mile transferable new-vehicle warranty, 10-year/100,000-mile powertrain warranty (which is not transferable; subsequent owners are covered under the 5-year, 60,000-mile new-vehicle warranty), and five years of roadside assistance.

In the past, Hyundai needed these attention-grabbing programs to help attract customers and boost sales. While these programs likely continue to influence purchases, the reality is that the current Hyundai lineup can truly stand on its own merits. In Consumer Reports tests, most Hyundais are performing well and reliability is in the top ranks.

Sales incentives can be icing on the cake, but they're not the cake. No matter what brands you are shopping, take the time to research the best performing, most reliable, and safest vehicles for your needs and budget. Then consider the incentives.

—Liza Barth