Coronavirus: Can you freeze car finance payments during Covid-19 lockdown?
It’s not across the board, however
Some car manufacturers are considering allowing payment holidays for customers whose finances have been adversely affected by coronavirus, according to car price guide Parkers.
Chancellor of the Exchequer Rishi Sunak has announced measures to ensure that people will not be left in financial ruin due to Covid-19, bringing in measures such as a scheme whereby the government will subsidise 80% of some workers wages, and a fund offering £350bn of support to businesses. He also said that £1bn of support would be made available for renters.
Naturally, however, some people are still worried about being able to pay monthly bills such as monthly car payments.
In response, some car manufacturers are considering schemes such as payment holidays, a term introduced to the collective lexicon in recent weeks when talking about mortgages. Rishi Sunak announced that mortgage payers enduring financial strife because of coronavirus would have the opportunity defer mortgage payments until they get back on their feet.
Parkers contacted a host of car makers to find out what financial support they would be willing to provide to struggling customers, and specifically if they would consider allowing payment holidays.
The Financial Conduct Authority (FCA), the UK’s financial regulatory body, said they wouldn’t comment on the car industry individually but said that they were expecting firms to “provide strong support to customers during this period.”
As is to be expected, many of the responses received from individual carmakers were rather vague, and Parkers summarised a large number of the replies using phrases such as “standard response.”
Owners of Fords came out looking most likely to get financial support. The manufacturer of two of the UK’s most popular vehicles (the Fiesta and the Focus) did not commit to specific measures to respond to coronavirus, but told Parkers that it “offers a number of tools to help vulnerable customers regardless of the situation. These differ slightly country by country but currently include reduced payments, payment extensions, payment holidays and pre-arrears forbearance.”
Another car maker giving good preliminary signals is Honda. Although it also gave a less-than-concrete response, a source at the Japanese company told Parkers that payment holidays could be on the table if things get even more serious. It is unclear how long before the increased lockdown measures it was that Parkers received this information.
Hyundai Motor, which also owns Kia, said that payment holidays may be possible for customers dependent on individual circumstances. It said that measures were in place to assist customers undergoing financial hardship and, “while this may include a payment holiday, each customer’s individual circumstances will be considered at all times.”
Mazda came out with a similar statement, saying that payment holidays will be available, though all cases will be assessed on an individual basis.
Initial signs from VW and Volvo are also good. Volkswagen, which owns brands such as Audi and Skoda, is reportedly working on something relating to payment holidays, and Volvo (which owns Polestar) said it is doing the same.
The overarching advice is that, if you are worried about being able to make your car finance payments, you should contact the finance provider. However, if you want to see what Parkers’ impressions are regarding how likely you are to receive financial help from your car company, you can do so here. It says that it will carry on updating the page as car makers settle on more specific policies.
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https://www.driving.co.uk/car-clinic/car-due-mot-coronavirus-lockdown/
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