Amid uncertain times, Ford offers vehicle return program
Karl Brauer went to work in mid-June doing a job he loved, and he ended the day with news it had come to an end.
“I was let go the day after my seventh anniversary,” said Brauer, 50, a longtime industry authority as executive publisher of Kelley Blue Book and Autotrader. “I’ve got a wife and we’re a single-income family with two kids, 21 and 19, with one on the autism spectrum and both in college.”
He had no warning he was going to lose his job. A few weeks before, he had been out new car shopping, but held off.
“There are plenty of people out there who just have no idea what is going to happen,” Brauer said. “They may feel completely confident in their job, but they’ve got friends or relatives who felt confident in their job two weeks ago and now they’re unemployed. It’s not really a question of responsibility as much a question of the unknown.”
It’s stories like Brauer’s that have a lot of consumers hesitant to make major purchases right now.
So Ford Motor Co. is launching a special program to offset this consumer anxiety.
The company is allowing customers who buy new or used cars through Ford Credit to return that vehicle within a year if payments can’t be made because of job loss. The special “Ford Promise” program announced Monday runs through Sept. 30.
It applies specifically to 2019, 2020 and 2021 purchased or leased new, used and certified pre-owned vehicles. Commercial use contracts do not qualify.
This latest initiative is a response to economic fear seen by car dealers.
“I definitely know there are customers who are uncertain about making a large financial decision at this time,” said Brian Godfrey, president of Pat Milliken Ford, west of Detroit. “We’ve seen customers who have put off a purchase or a decision on renewing their lease because of the uncertainty.”
This new program, he said, is designed to give customers a little extra confidence.
Consumer data collected by Ford documents the concern.
“We’ve been doing a lot of different research since the pandemic started,” said Matt Atkenson, U.S. retail communications manager at Ford. “We’ve found in the data that there’s a growing population of customers saying, with everything going on, they’re just not comfortable pulling the trigger. Not just automotive, but major purchases.”
Fear of job loss is key, he said. As economic forecasters continue discussing the crisis and more companies announce bankruptcy — including J.Crew, Neiman Marcus, JCPenney, Pier 1 Imports, Hertz and Gold’s Gym — no one knows what to expect.
Ford pointed to Cox Automotive data that an estimated 32% of potential customers are delaying auto purchases, citing market uncertainty and fear of unemployment.
“To qualify for this debt waiver,” Atkenson said, “you have to have involuntary job loss. If someone is eligible for state unemployment, that will qualify them to receive this. It begins 30 days after a vehicle purchase.”
Automakers including Ford have allowed customers to delay making car payments under certain circumstances related to COVID-19, but this is the first time an automaker is guaranteeing you can return your new vehicle.
Ford Credit will buy back the vehicle at its average trade-in value. If the difference between the vehicle value and the amount owed is greater than $15,000, the program limit, then the customer is responsible for that difference, Ford said.
The customer would also be responsible for any late or deferred payments and vehicle damage.
A new plan unveiled by Ford will let buyers of new vehicles return them should they suffer an involuntary job loss.