Hyundai Helps Student Pay Back their Loan
FACTS
- The South Korean car maker Hyundai –through their US subsidiary Hyundai Motor America– launches Student Assurance, a new programme for helping customers pay back their student loan.
- With Student Assurance, eligible customers can benefit from a contribution of up to $900 from Hyundai, sent directly to settle their student loan when they buy or rent a new Hyundai car model.
- For now, this offer is only available from Hyundai car dealers in California and near Phoenix, from April 1st to September 30, 2019.
- This programme relies on a partnership with Gradifi, which focuses on credit repurchases and administrating student loan benefits, with help from companies and brands, such as Hyundai.
- Customer process:
- The customer visits the programme’s website to make sure he is eligible
- If so, he is sent a Reward Code
- When renting or buying an eligible new Hyundai car, he uses this code on Student Assurance Center website
- Gradifi contacts the customer, sends instructions to create an account and register their student loan for verification and sends the contribution to their student loan debt.
CHALLENGES
- Addressing young adults’ needs, helping them pay back their student loan. According to Hyundai Motor America, student loans are among the main financial stress factors in the U.S., and one of the main reasons why hold off purchasing a new car.
- More than 44 million U.S. citizens are still paying back their student loan, totalling more than $1.5 billion according to the Fed. When graduating, the average student loan borrower has $37,172 in loans.
- With this service, Hyundai wants to increase its sales for new cars in the U.S. and aim for a key target segment.
MARKET PERSPECTIVE
- Student Assurance results from an internal Hyundai innovation challenge, Better Idea Generator (BIG) launched in the end of 2017. This challenge allows all employees to design and present new ideas likely to be implemented.
- Hyundai already featured programmes for supporting their customers with, for instance, Hyundai Assurance (a range of insurance products for people purchasing or owning a Hyundai car) and a programme for protecting customers in case they lose their job at a time of economic recession.
- Student Assurance could later on be rolled out across the U.S. based on initial feedback from their car dealers and customers.