The Daily Campus

Issue date: 4/13/09 Section: Commentary

Thanks to America's widespread economic depression, few people are willing to spend money on anything new or extra - especially not a car. However, General Motors (of all companies) have been advertising their payment protection plans.

The commercials display nice new cars, all for decent prices, and then the real deal - a nine-month protection plan wherein GM will cover your car payments if you happen to get laid off. While this is a great way to draw customers, it is important to pay attention to the small print because this plan comes with an astounding amount of catches.

The commercials say that if you lose your job, they will cover your payments for nine months, but there's a catch. The commercial doesn't say how long you must have held your job. The small print says that you must have been employed at least 12 weeks before purchasing the car, and 30 hours a week for 90 days after for the benefits to apply. This is the dealership's way of assuring that you do not use their payment assurance as a desperate, last-minute resort. In addition to the employment limits, GM only promises to pay up to $500 a month - which may not be applicable in all situations. A person must be aware of their budget and car payments before they sign up for this plan.

There are several other details that can only be seen in the fine print of these contracts. First, your loan term cannot be more than 72 months, or six years. Most car payments do not last that long if you're lucky, but this is another place where monthly payments are important to remember. They also then tell you that you must have made at least 50 percent of the payments before GM will help you - not a big help if you lose your job within the first year.

An article on autoinsane.com has another little bit of bad news from GM's full coverage plan. At the end of the article, it explains how GM may not agree to pay at all even if all the other elements are fulfilled. It says that the amount they pay will depend on their agreement with the Department of the Treasury and other economic factors.

After hearing this, any buyer should be turned off and give up on this offer. The reliability of GM has been shaky at best, due to poor management skills. However, if you are reasonably sure that you are not at risk of losing your job in the near future, this can be a good pick and will hopefully provide some promise and protection. When making any financial decision these days, be sure to fully research and understand the facts before the companies have a chance to take advantage of you. Do not simply take any salesman's word for it; ask for it in print. Businesses just want to make money, so don't let them take yours.

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