April 30, 2020 / 7:16 PM / a month ago

Kia to offer 'job loss insurance' to new car buyers in Europe

FRANKFURT (Reuters) - Korean carmaker Kia plans to offer insurance in Europe which protects clients from having to make monthly payments on a new vehicle if they lose their job, a scheme designed to entice reticent customers back into showrooms after the coronavirus shutdown.

FILE PHOTO: Visitors walk past the logo of Kia Motors at its pavilion at the India Auto Expo 2020 in Greater Noida, India, February 5, 2020. REUTERS/Anushree Fadnavis

The insurance scheme, which costs 15 euros to 20 euros a month, allows new car buyers to delay monthly payments until they are rehired, Emilio Herrera, chief operating officer for Kia Motors Europe, said on Thursday.

“We are in discussions over how to implement it in the majority of markets in Europe. We want it in place as soon as markets reopen in May,” Herrera said.

Santander Consumer Finance provides the insurance for Kia customers in several European markets, including in Germany, Kia said.

Government stimulus measures will also be needed to revive the economy, Herrera said.

“We need to put in place scrappage plans like in 2009,” Herrera said. Combined with measures like unemployment insurance these steps may become confident enough to purchase a car,” Herrera said.

Potential stimulus plans should help cut carbon pollution, but also incentivise customers to buy all categories of car, not just electric and hybrid vehicles, he said.

“Electrified cars are much more expensive than combustion-engined vehicles,” Herrera noted, adding that in times of a crisis, consumers tend to make conservative buying choices.

The crisis has already hit demand badly, with sales down more than 25% in the first quarter. April will be the worse, showing declines of around 70%, with demand expected to improve thereafter, Herrera said.

In Germany, where smaller car showrooms have been allowed to open for the past week, traffic is 50% below pre-crisis levels, Herrera said.

Reporting by Edward Taylor; Editing by Dan Grebler

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