Kia's economic insurance policy

It has proved a popular choice by struggling American operations but Kia Australia has become the first local firm to launch an assurance program for new car buyers. The new program will allow new car buyers the option of handing back the car if they lose their job.

Under Kia's program anyone who purchases a new Kia between now and the end of June will be able to return the car if they involuntarily become unemployed in the next 12 months. Customers will be required to meet particular criteria including certain types of financing.

"Protecting our customers has always been our priority at Kia," says Alan Crouch, national sales manager for Kia Australia. "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.

"If someone has decided they need a new car for themselves or their family, the security of Kia's unlimited kilometre five-year warranty and the certainty of Kia Assurance means there has never been a better time to buy a new Kia."

Kia's parent brand Hyundai created the concept earlier this year and enjoyed success posting sales increases in January, February and March. Ford, General Motors and Chrysler all followed suit with similar incentive deals in a bid to keep sales going as the US economy crashes.

Hyundai Australia spokesman Ben Hershman told the Carsales Network that the local operation won't be following the path set by its US outfit or Kia. Hershman explained that the strength in the Australian economy compared with the United States and Europe means such a program isn't required.

"We see the market as slightly different to America at this stage," Hershman said. "We keep an eye on the market though and we keep out options open."

And although most other brands contacted by the Carsales Network indicated they aren't interested in the scheme there were those that see value in it. Nissan Financial Services executive director George Leondis admitted that he is monitoring the program.

"Not specifically in Australia," Leondis says when asked if Nissan is considering an assurance program of its own. "We're certainly not discounting it as a possibility. We haven't done a business case on it. It's got its merits but it's also got its downsides."

Leondis says Nissan examined the program concept when Hyundai launched it in the US but he says the differences in the economy and unemployment rates locally have a big impact on its value for the Australian market.

"It's going to be interesting to see how Kia performs with it," he says.

"The downsides to something like that are considerable. You can make assumptions on the unemployment figures that are completely wrong. You also don't know what pockets of society are going to be the most affected. Is it Kia buyers or is it Mercedes buyers? Or something in between?"

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