There Are Deals In Case You Are Laid Off, But Think Twice About Spending

There Are Deals In Case You Are Laid Off, But Think Twice About Spending

Companies from homebuilders to carmakers to airlines are rolling out job loss insurance programs to entice you to buy big-ticket items.

Florida’s largest homebuilders, including Ryland, Lennar and K. Hovnanian Homes, all promise to pay up to six months of mortgage payments if you’re laid off within two years of buying a home.

Lisette Minnick, director of marketing for K. Hovnanian Homes, said the layoff insurance plan is helping get some potential buyers off the fence.

“We’re offering this protection to offer peace of mind to the consumer,“ Minnick said. “It lets them know we care. Obviously right now times are tough so we are taking extra steps to show consumer we’re doing everything we can.“

Hyundai is also offering a similar job loss protection program. If a buyer is pink-slipped within 12 months of purchasing a car, the company agrees to take it back.

Patricia Kemp is in the market for a car, and said she thinks the Hyundai protection sounds like a good idea.

“I think it would make them more competitive and encourage people to buy,“ Kemp said.

JetBlue Airlines is also getting a program off the ground. The company vows to let you out of any travel plans you book in the event of a layoff.

But consumer experts advise reading the fine print.

“There’s a lot of ‘Catch 22’s’ for you. They’re not in it to help you. They’re in it to help themselves,“ cautioned Richard Suttmeier, market analyst and CEO of ValuEngine.

For example, K. Hovnanian’s plan requires the homebuyer be a full-time employee for at least 12 weeks, have approval for unemployment benefits and make at least two payments on the mortgage before becoming eligible for the protection.

And there is one final warning from the Consumer Federation of America based in Washington, D.C. According to Jack Gillis, director of public affairs, if your employment is unstable, you should be saving not spending.

“The bottom line is that any consumer who is seriously concerned about losing their job should simply not be buying big ticket items right now,“ Gillis said.