The latest incentive programs from General Motors, Ford and Hyundai promise to protect customers even if they lose their jobs.

On the face of it, these programs sound too good to be true. But in today’s depressed market, auto industry analysts say they really can make economic sense for the car companies and consumers.

If these programs work, expect to see competitors join in.

In GM’s case, the automaker is offering to make up to nine months of payments of up to $500 each if you lose your job for what it calls “economic reasons.” Ford says it will make up to 12 months of payments totaling $700 per month or less. Naturally, there are additional terms and conditions, starting with the time limit. GM’s offer could be renewed, but for now it applies only to cars purchased before April 30. Ford’s deal applies to cars purchased before June 1.

Check their Web sites for details — and

Hyundai kicked off this trend in January, offering to let customers “walk away” from a new-vehicle purchase if they lost their jobs within the first year. That’s a valuable offer, but then there’s the flip side. After losing your job, you’ll need a car more than ever to find a new one. Hyundai later sweetened the offer to make up to three months of payments before the customers have to turn in their cars.

How can the car companies afford to do all this? They don’t have much choice.

U.S. auto sales were down 36.8 percent in March compared with the year-ago month, according to the industry research firm AutoData Corp. March was the seventh month in a row that U.S. auto sales fell below 1 million cars and trucks. Before last September, that hadn’t happened for even one month since 1993.

At the same time, discounts like cash rebates, zero-percent financing and “employee pricing” simply aren’t working. In 2001, zero-percent-financing offers by many companies set off record car and truck sales. In 2005, GM began its “Employee Pricing for Everyone” promotion; Ford and Chrysler followed, starting a similar rush.

But today, people are so worried about their jobs they aren’t buying, no matter how deep the discount. The latest incentive programs are aimed squarely at that anxiety, promising to protect customers even if they lose their jobs.

GM’s program even offers trade-in help. Customers looking to trade in their old vehicle often find that they owe more on their old loan than the vehicle is worth. That’s often called being “upside-down,” or “underwater.” For cars and trucks purchased now, GM will help make up the difference, up to $5,000. In other words, GM will provide up to $5,000 to pay off the old loan on your trade-in in order to finance the purchase of another new GM vehicle.

“People are worried about so many different things,” says Jessica Caldwell, industry analyst for, a consumer auto shopping and research Web site. “It’s a tough time to make the decision to embark on a relationship with any automaker.”

Basically, the payment-protection plans are a form of insurance, with a cost to the car companies based on how likely they are to be used.

Even though Ford and GM continue to offer cash rebates and discount financing, they can pay for customer payment-protection plans by shaving money from their other discount programs to pay for the new incentives.

“The incremental cost (to GM) might not be as great as you think,” says GM spokesman John McDonald.

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