Hyundai offers no-penalty returns

The answer was to offer a way out for a buyer who suffers a loss of income because of a number of specified, life-changing circumstances. Here's how it works:

If you buy or lease a new Hyundai you're automatically protected once you make the first two scheduled payments. After that if you experience a permanent income loss during the first 12 months of ownership, the vehicle can be returned. Acceptable reasons for returning the vehicle are:

• Involuntary unemployment: Permanent release from your full-time job.
• Physical disability: Unable to perform the duties of your full-time job for a period of at least 60 days.
• International employment transfer: Permanent transfer outside the United States for 24 months or longer.
• Self-employed personal bankruptcy: Sole income must be derived from being self employed.
• Loss of driver's license: Due to medical impairment.
• Accidental death.

Basically the program covers up to $7,500 of negative equity. That is, if the returned vehicle is worth less than the balance of the loan or lease, the program will cover up to $7,500 of the difference. The borrower would have to make up any additional difference. According to Hosford, the $7,500 coverage will satisfy the negative equity in the majority of cases. "The $7,500 should cover the one-year depreciation of any car we make," he stated, "even the top-of-the-line Genesis."

Hyundai is so far the only manufacturer to offer the Walkaway Protection for Automotive Financing plan.

With the Hyundai version, coverage expires at the end of 12 months, and there is no provision for increasing the term length or the $7,500 negative equity amount. The Walkaway dealer program lets consumers buy upgraded plans -- priced from about $300 to $1,000 -- that can increase the coverage up to 84 months or double the negative equity covered to $15,000. Another upgrade includes a one-time 90-day payment benefit in the event of a temporary period of involuntary unemployment or physical disability. If you still can't make the payments at the end of that period you can return the car. Hyundai is offering the 90-day bonus plan for free through April 30.

In the end, says Jeff Beaver of Walkaway, everyone is happy. "It creates incredible goodwill between the dealer and the customer," he says, "because the vehicle can be returned. Most people are upside down and -- without this plan -- the dealer just can't take the vehicle back without losing money."

Recently retooled, Walkway Protection for Automotive Financing currently has only a few participating dealers outside of Hyundai, but Beaver says a major rollout is under way. Soon consumers will be able to log on to its Web site (www.walkawayusa.com) and access a list of participating dealers.