Kia to offer ‘job loss insurance’ to new car buyers in Europe

South Korean automaker Kia plans to offer insurance in Europe which protects consumers from having to make monthly payments on a new vehicle if they lose their job, a scheme designed to attract introverted customers back into showrooms after the coronavirus shutdown.

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

“We are in talks 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 gives the insurance for Kia customers in Germany and other several European markets.

Government stimulus measures will also be required to restore the economy, Herrera stated.

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

Potential stimulus plans should help reduce carbon pollution, but also incentivize customers to purchase all categories of car, not just electric and hybrid vehicles, Herrera said.

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

The crisis has already hit demand significantly, with sales down over 25% in the first quarter. April will be the worse, indicating declines of around 70%, with demand expected to enhance thereafter, Herrera said.

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

Coronavirus has so far infected more than 1,379,699 people in Europe and killed more than 125,897 people in the continent.