Amid un­cer­tain times, Ford of­fers ve­hi­cle re­turn pro­gram

Orlando Sentinel - - Wall Street Report - By Phoebe Wall Howard

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.

SPENCER PLATT/GETTY 2019

A new plan un­veiled by Ford will let buy­ers of new ve­hi­cles re­turn them should they suf­fer an in­vol­un­tary job loss.

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