Many households are having to endure significant changes to their personal finances in recent weeks due to the COVID-19 pandemic. Although the introduction of incentives such as mortgage payment holidays have eased the pressure on some families, there are still questions for motorists who are struggling to pay monthly fees for their vehicles.
With around 9 in 10 new cars in Britain bought using some sort of finance, the coronavirus outbreak will certainly be causing concern for many drivers who have a shrinking budget. If you are looking for some relief on your car finance payment due to COVID-19, here is what you should know….
Tell your finance provider straight away
All lenders are required by the Financial Conduct Authority (FCA) to work with their customers to come to an arrangement that is in the interests of fair and appropriate customer outcomes. This includes offering payment holidays of up to three months for customers who’s individual or household income has been affected directly by COVID-19.
Communication is key. If you are a customer suffering financial difficulty or are anticipating payment problems due to the coronavirus, get in touch with your lender as soon as possible. Be aware that call volumes will be very high at the moment, and most lenders will be working with an unprecedented number of concerns. Use online forms and emails where possible. Some lenders may have moved employees from sales and new business acquisition to client support. They may also pause new lending to support their existing client base. Be patient when contacting your lender.
Work with your lender
The solutions will vary from lender to lender and customer to customer. Keep in mind that lenders will be underwriting whilst giving consideration to customers in different circumstances, so two people may not get the same outcome. Discuss your concerns with your lender and work together to find an answer that best suits your circumstances. Not all lenders will be able to offer you a car finance payment holiday, but they will be sympathetic to your situation and can advise on further action to take.
Understand the consequences
If your lender is able to offer you a car finance payment holiday, be sure that you understand its impact. In most cases, if you take a payment holiday for two months, your loan will be extended for two months to cover the missed payments. Also, there should be no impact to your credit score. However, it will be visible on your credit file.
During the pandemic, you will have the option to stop your monthly car finance payments temporarily for a period of up to three months, which in some cases may mean you will accrue additional interest charges. At the end of the car finance payment holiday, the finance company will recalculate the remaining monthly payments and may increase them slightly to cover the cost of unpaid fees.
Contacting your lender
Are you struggling to pay your car finance payment? You can easily access lender contact details for many of My Car Credit’s finance panel. Get in touch with them today to discuss your circumstances.
If you are concerned about the financial impacts of COVID-19 or are experiencing financial difficulties, the following not-for-profit organisations also provide free, confidential and impartial debt advice and support:
Citizens Advice – www.adviceguide.org.uk
National Debtline – www.nationaldebtline.co.uk
Money Advice Service – www.moneyadviceservice.org.uk
If you need any further advice, the team at My Car Credit is here to help. We have years of experience in handling unique client cases. We are following Government guidelines and industry updates on dealing with the coronavirus and its consequences. Get in touch on 01246 458 810 or email us at email@example.com
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