Kia first with retrenchment cover

KOREAN car importer Kia Motors Australia (KMA) has taken a leaf out of its parent company Hyundai’s book by introducing Kia Assurance – retrenchment insurance for people who buy a new car on a secured loan or lease.

The free scheme – similar to Hyundai Assurance Plus in the US and New Zealand – allows the buyer to hand back the keys and walk away should they become involuntarily unemployed within 12 months of purchase.

KMA became the first car company to introduce such a scheme in Australia when it launched Kia Assurance in a big post-federal budget advertising splash that included exclusive sponsorship of News Ltd newspaper budget special wraps.

At this stage, the offer is only temporary and closes on June 30, but the company has not ruled out extending it, should it take off.

Unlike the US and NZ Hyundai schemes, Kia Assurance does not guarantee to make car finance repayments for up to three months, instead only promising to allow owners who end up retrenched, transferred overseas or unable to drive because of a physical disability or medical condition to return the car and rip up the remainder of the financial obligation.

Hyundai Australia has so far resisted copying the US scheme, saying the Australian market was not feeling the same levels of stress as the US or UK markets.

Hyundai spokesman Ben Hershman said: “We are continuing to monitor the situation, but we have no plans to implement such as scheme.” In the US, Hyundai Assurance Plus has been credited with driving a sales upswing since its introduction in January.

Kia Assurance is an adaption of a commercial insurance product from Swann Insurance (Aust) Pty Ltd and Walkaway Australia Pty Ltd, which has been available elsewhere for 15 months. It will only be available from participating Kia dealers and only on certain types of finance.

KMA national sales manager Alan Crouch said Kia Assurance offered Kia customers peace of mind when buying cars on finance.

"Protecting our customers has always been our priority at Kia,” he said.

“Just as we offer the protection of an unlimited-kilometre five-year warranty across our range, we believe Kia Assurance will help to protect new Kia buyers, and offer them further peace of mind when they buy a new Kia on finance during these uncertain times.”

KMA national public relations manager Jonathan Fletcher said Kia has made similar offers in Canada and the United States.

He said the program in Australia was kicked off nationally with an advertising campaign involving newspapers, TV commercials and outdoor advertising signs in the wake of the federal budget when economics were top of mind.

Mr Fletcher said that while the current Kia Assurance program was due to end on June 30, the company would be monitoring its success with a view to extending it if it becomes an unqualified success.

Read more:

Hyundai adopts redundancy scheme in NZ

'No plans' for Hyundai retrenchment cover in Oz