Ford has a better idea: Buyer protection

Ford to cover car payments if buyer loses job

DETROIT (AP) — Ford Motor Co. said Tuesday it is offering a payment protection plan to help reassure consumers who may be putting off buying a new car because of worries about losing their job.

By mid-morning, GM announced it would likely offer a similar program.

The Ford offer comes as auto sales have been battered by the recession and tight credit, reaching their lowest levels in 27 years. Ford's sales declined 48 percent in February.

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.

Hyundai Motor Co. launched a program in January that allows buyers to return a vehicle within a year if they can't make the payments due to a job loss or disability. The company said the program helped it avoid a double-digit sales decline last month, reporting a 2 percent slide.

Dearborn, Mich.-based Ford is also offering zero percent financing on certain Ford, Lincoln and Mercury vehicles.

"Consumers remain anxious about the economy and their own outlook for the future," Ken Czubay, vice president of sales and marketing, said in a statement.

Ford's announcement comes a day after President Barack Obama said the government will back new car warranties issued by General Motors Corp. and Chrysler LLC, who have accepted federal assistance and are seeking more, to help boost consumer confidence about buying their vehicles.

Ford has not requested federal bailout funds.

GM has said it is considering a program that would help new car owners keep their cars, in the event they lose their job.

New GM CEO Fritz Henderson is likely to announce a program similar to Ford's at a news conference later Tuesday. The company's current sales incentives expire today, and GM normally announces changes at the end of the month.

"Stay tuned," said GM spokesman John McDonald.