DALLAS-Hyundai made headlines with its offer to take back cars if buyers lose their income within a year after purchase, but one credit union vendor has already made it possible for CUs to promote the same deal.
Walkaway USA began offering Walkaway Protection for credit unions and other financials a year and a half ago, noted Ricky Wolfe, president of business development for EFG Companies, Walkaway's parent company. Wolfe acknowledged that interest from financials had not been very strong. "That changed when Hyundai launched its offer. We've been getting calls from about 15 financials a day since the Hyundai deal began, most of them from credit unions."
Walkaway Protection is a vehicle return program. After a consumer completes a claims process, a dealer buys back the car and sends the money to Walkaway, which covers any negative equity up to program's limits. The financial gets the cash and the consumer returns the car to a Walkaway "return facility," a local car dealership. "Complimentary" products that protect consumers for one year and between $2,500-$7,500 in negative equity cost the CU from $35-$75, Wolfe shared. Upgrades are available with extended terms that financials can provide to consumers for a fee, and upon which the credit union can earn commission income.
As CU Journal reported Jan. 12, Hyundai is offering Hyundai Assurance, a private label version of Walkaway Protection. The carmaker is advertising the offer heavily on television saying, "We've got your back for one full year." According to the carmaker's website, the deal allows consumers, after making two payments and meeting all payment obligations up to the time they seek to return the car, to "walk away" from the loan or lease and not pay negative equity of up to $7,500.
The arrangement also assures that consumers' credit ratings will not be affected. The offer is available for the first year and covers "life-altering circumstances," including involuntary unemployment, loss of driver's license due to medical impairment, and self-employed personal bankruptcy.
Wolfe contends the economy, combined with the Hyundai publicity, have made Walkaway "right for the times. The No. 1 thing on consumers' minds today is job stability."
Jeff Beaver, SVP of marketing for EFG, explained that Hyundai Assurance comes with any Hyundai purchase, regardless of whether financing is through Hyundai or another financial. "Credit unions participating in indirect lending with the local Hyundai dealer have a great opportunity to benefit from the offer," Beaver said.
The Rancho Cucamonga, Calif.-based Credit Union Direct Lending (CUDL) agrees. "We see this as an opportunity for credit unions to build their auto loan portfolios," said Bill Meyer, CUDL corporate communications and PR lead.
