Oh, the Gimmicks They'll Offer to Pack Auto Buyers Into Showrooms

Owning a car is expensive, especially with $4 a gallon gas, and that's led to a series of wacky incentives, from carmakers and others, designed to ease the pain -- and influence your buying decisions.

Many of these promotions are descendants of the stunt promotions offered by "crazy" used car salesmen, and they disappear when the buzz is gone -- but they're perennials because they increase visibility for their brands. And they don't cost all that much in relation to the new business they generate.

The incentives include free gas, free insurance, pre-approved trade-in values, and free lease payments when you get laid off. The deals are gimmicky, but often quite effective in the short term and more attention-getting than, for instance, zero-percent financing. And sometimes there are unforeseen complications.

Free insurance!
The most recent incentive is a trial balloon offered earlier this month by General Motors. Buyers of cars, trucks or crossovers before Sept. 6 in Oregon and Washington are offered a year of free car insurance through MetLife Auto & Home.

According to GM's Tom Henderson, the program, worth about $1,000 to a Cruze buyer, was spurred by market research that indicates many would-be car owners don't buy because they can't afford the high premiums on new cars. The offer drew wide coverage, but perhaps predictably it also brought a strong reaction from the insurance industry, which doesn't like another industry muscling in on its territory.

According to Bob Rusbuidt of the Independent Insurance Agents and Brokers of America:

We have raised licensing and regulatory concerns, along with important consumer issues. MetLife Auto and Home is open to our concerns and is seriously reviewing them.

Everybody loves gas deals
It's not hard to see the appeal of free or subsidized gas, but the actual savings for consumers are pretty penny ante. Among the retailers currently offering gas cards (worth $40 or less) are grocery chain Publix, Wal-Mart and CVS. Late last month, MasterCard and Expedia teamed up to offer $25 gas cards to anyone who booked a two-night stay or vacation package by July 4 through Expedia (and on the card, of course).

According to Michael McNamara, a vice president at Mastercard Advisors Spending Pulse, people like gas incentives because it's something they don't have any choice about buying:

They view it as having an immediate positive effect on their wallet. That's why so many retailers are turning to it.

Lose your job, but not your car
One unique Hyundai Assurance program, launched during the 2009 Super Bowl and discontinued earlier this year, "has become the gold standard in auto-incentive innovation," Edmunds reports. It was a brilliant concept, and certainly reassuring -- the automaker took over your lease or loan payments if you got laid off. Hyundai didn't actually pay out much with only 100 participating customers, but the concept attracted invaluable free publicity from recession-conscious editors.

Hyundai had just 2.1 percent U.S. market share in 2008, but it's over 4.4 percent now, with goals of more than five percent this year. It doesn't really need incentives the way the Big Three did during the recession, but the company is still offering them. Since May, the Assurance program has offered guaranteed trade-in value -- when you buy a new Hyundai you get a chart showing what the company will pay for it up to four years later. Hyundai says the cars will be reassessed at trade-in:

If the vehicle is worth more than what we guaranteed, the customer will receive the higher amount. Win-win.

Related:

• People Love Their Gas Guzzlers, but $4 Gas Leads to Divorce
• The Cost of Driving is Up, and It's Worse Than You Think