Kia Assurance will be offered to private buyers who purchase a new or demonstrator Kia vehicle before 30 June 2009.

In an Australian first, Kia has announced it will cover loans for buyers who lose their jobs.

The company yesterday launched an insurance product called Kia Assurance that will effectively cancel your debt if you lose your job – or suffer similar financial straits – and applies to new or demonstrator cars bought before the end of the financial year.

The deal covers the gap (up to $7,500) between the balance owing and the trade value of the vehicle, allowing the buyer to hand the vehicle back with no financial penalty in most cases.

“We believe Kia Assurance will help to protect new Kia buyers and offer them further peace of mind when they buy a new Kia on finance during these uncertain times,” Kia national sales manager Alan Crouch says.

In addition to the involuntary unemployed, the deal will extend to people in other life-changing circumstances, such as a driving-restrictive medical condition, physical disability or international job transfer.

Participating Kia dealerships will offer private buyers who purchase a new or demonstrator Kia vehicle on certain types of vehicle finance before 30 June 2009 the option of returning the car if they involuntarily lose their primary source of income.

The Kia Assurance contract – which follows a similar deal offered by the carmaker’s stablemate Hyundai in the US – is based on an insurance product designed by Swann Insurance and Walkaway Australia, which has been available here for about 15 months for a premium, but is being offered free by Kia until 30 June.

A Kia spokesman said the scheme would be evaluated after that to see if it would be continued.