Unhappy with your Hyundai? Take it back
Forget a test drive. How about a test buy?
Hyundai announced Tuesday that it would allow U.S. shoppers to return their vehicles within three days if they’re not happy with their purchase.
Although franchise automotive dealerships can offer similar deals on their own, Hyundai is believed to be the first major automaker to extend the offer across its entire network. The company will also allow buyers to complete most paperwork online and schedule those old-fashioned test drives through the Web.
The overhauled sales procedure comes as automakers are feeling pressure to remake the dealership experience into a more digital-friendly process.
Silicon Valley automaker Tesla has challenged the industry by opening stores, instead of dealerships, and allowing people to do everything online. With company-owned stores, which established automakers cannot open because of franchise laws, Tesla can sell cars directly to consumers in person or online.
While the traditional dealership model has not changed much, Hyundai is scrambling to reconnect with American consumers as its product lineup struggles because consumers no longer are interested in its stalwart passenger cars.
Despite strong marks on J.D. Power’s quality rankings, Hyundai’s U.S. sales tumbled 12.9% through September, compared to a year earlier, as its market share plunged from 4.5% to 4%. Many Americans are ditching passenger cars for crossovers and sport-utility vehicles.
The Korean automaker is hoping to again ride a wave of momentum by tinkering with the traditional U.S. automotive sales model. In the heat of the Great Recession in 2009, the company famously introduced the first iteration of its Hyundai Assurance program, allowing anyone who lost their job to return their vehicle for free.
With the new program, dubbed Hyundai Shopper Assurance, customers will be allowed to return their vehicles for any reason for a full refund as long as there’s no damage and the vehicle hasn’t accumulated more than 300 miles.
“I don’t know of another manufacturer’s dealerships offering a cooling-off period,” Kelley Blue Book analyst Rebecca Lindland said.
But the offer comes with a cost for the ailing automaker. “Keep in mind these are franchises, so Hyundai must be offering some kind of compensation to their dealer body for vehicles that are returned,” Lindland said.
Hyundai said the new sales process would start in Miami, Orlando, Dallas and Houston. It will hit all dealers by early 2018.
“We’ve listened to our customers and they want convenience and simplicity when it comes to buying a car,” Hyundai America chief marketing officer Dean Evans said in a statement.
One significant change is a push to reduce in-person paperwork by allowing consumers to complete most of it online, including applying for financing, estimating payments and receiving a value for a trade-in.
The new program also involves what Hyundai calls “transparent pricing,” in which the actual price including incentives is posted to dealer websites. Other automakers have tried similar versions of that strategy, including no-haggle pricing.
Hyundai’s U.S. market share has dropped to 4%.