GM and Ford offer buyer protection

GM and Ford announced this week new progams to assist new car buyers with their payments if they lose their jobs.

The GM plan can be seen here, in summary, part of the plan will cover your car payments for up to 9 months up to $500/month.

The GM Total Confidence Plan:

• Protects your Paycheck: 'Payment Protection*' provides up to nine months of payments on vehicle loans or leases ($500 max/month) if you lose your job for economic reasons. When looking for a job, you need a vehicle more than ever. 'Payment Protection' helps you get back on your feet.
• Protects your Investment: Once you are halfway through your finance contract, the customer qualifies for 'Vehicle Value Protection.*' This helps protect customers against uncertainty in the future used car market. For example, on a 60-month contract, you become eligible after the 30th month. Much as we've seen home prices decline in this tough market - and homeowners may owe more than the current resale value of their house - 'Vehicle Value Protection' provides peace-of-mind for customers when they want to go purchase another GM vehicle.
• Protects your Vehicle: GM's 5 year/100,000 mile transferable powertrain limited warranty (whichever comes first) plus roadside assistance and courtesy transportation. GM protects your vehicle with the best coverage in the business - so you don't have to worry. With the high quality of GM vehicles today, offering the best coverage only makes sense. See your dealer for warranty details.
• Protects your Family: One Year OnStar 'Safety and Security' Package. Knowing that OnStar is there if you should ever need them really makes a difference. With Automatic Crash Response, OnStar's cutting-edge technology that protects your family when they travel. Visit onstar.com for more details.

While this plan is a good idea to help move vehicles which are sitting idle on GM dealership lots, it does not reinforce financially sound decision making. Think about it, if you are in a position when you lose your job that you are unable to make your own car payment for 9 months, you do not have a sufficient emergency fund in place and had NO business buying that new car to begin with.

The 'Vehicle Value Protection' part of this is a risky proposition, haven't we already seen the result of companies insuring bad debt?

The warranty and OnStar for the first year have long been a part of GMs structure.