How GM and Ford protection plans stack up

By MSN Money staff and wire reports

Ford and General Motors are joining Hyundai in offering payment protection plans to lure buyers who might be worried about losing their jobs. And, in a twist recognizing the plunging values once cars leave the showroom, two of the plans also promise to cover negative equity.

The offers come as auto sales have been battered by the recession and tight credit, reaching their lowest levels in 27 years. GM’s sales are down 51% through February, year over year, and Ford's are down 46%.

Hyundai posted a 5% sales increase in January after unveiling its Hyundai Assurance plan.

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Ford said its Ford Advantage Plan, which starts today, will cover payments of up to $700 a month for up to a year on any new Ford, Lincoln or Mercury vehicle if buyers lose their jobs. The offer runs until June 1.

Hours later, GM announced its Total Confidence Plan. GM's new chief executive, Fritz Henderson, said the company will make up to nine car payments of up to $500 each for customers who lose their jobs through no fault of their own. GM also is offering to make up negative equity for buyers who have reached the halfway point of their loans and want to trade for another GM vehicle.

Customers must qualify for state unemployment benefits to be eligible for GM's program. The offer starts Wednesday and runs until April 30.

A growing trend

Hyundai launched its program in January, allowing buyers to return a vehicle within a year if they can't make the payments due to a job loss or disability. The company said the program helped it avoid a double-digit sales decline in February, when the South Korean carmaker reported a 2% slide.

Hyundai's coverage comes through Walkaway, a Dallas-area insurer that has offered such protection in Canada since 2000 and more recently in the United States through individual car dealers and financers. Only now, though, has the coverage surfaced as a part of sales promotions in dealers of nearly all brands.

Comparing the guarantees

	Hyundai Assurance Plus	GM Total Confidence	Ford Advantage Plan
Covers payments up to	3 months	9 months	12 months
For this period	12 months	24 months	Before Jan. 1, 2010
Maximum monthly payment	None*	$500	$700
Negative equity assistance	Yes	Yes	No
For this period	12 months from purchase	Second half of the loan	N/A
Limit on negative equity relief	$7,500 if vehicle is returned	$2,500 on a sale, $5,000 on a trade	N/A
Offer available	Through April 30	Through April 30	Until June 1
Notes	*Payments deducted from negative-equity limit if car is later returned.	Negative equity covered only if purchasing another GM vehicle.

Walkaway says about 1,000 dealers and lenders offer its coverage on auto loans.

Today's announcements come a day after President Barack Obama said the government will back new car warranties issued by GM and Chrysler -- which have accepted federal assistance and are seeking more -- to help boost consumer confidence about buying their vehicles.

Ford has not requested federal bailout funds.

Ford has said it would partner with its dealers to introduce a program that would help local charities affected by the economic downturn, and the company has announced 0% financing for 72 months on certain models as well.