According to an article in the Dallas Morning News, Ford Motor Co. and General Motors Corp. are offering payment protection plans to consumers who are hesitant about buying a new car because of possible job losses in the future
The article said:
Ford said Tuesday it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1.
Hours later, GM said it will make a similar offer. GM’s new CEO, Fritz Henderson, said the company will make up to nine car payments of $500 each for customers who have lost their jobs through no fault of their own. Customers must qualify for state unemployment to be eligible for the program. The program starts April 1 and runs until April 30.
Desperate measures for companies facing the possibility of bankruptcy and especially considering the fact that more job losses are highly probable. Despite this latest stunt to drag in the sales a GM bankruptcy is highly probable because they simply do not have enough cash flow to survive.
For those who may consider purchasing a new car under these terms, take a step back and look at the entire picture. Purchasing a new vehicle, even with these terms is a risky business for debtors who are already one or two paychecks from bankruptcy. Even if the nearly bankrupt automakers pay your car note for a year, you are still required to pay car insurance which can be costly for new vehicles.
How will you manage those payments on a minuscule employment benefits check? Now is the probably not the time to make risky financial decisions that may push you into personal bankruptcy. Tread carefully.