The Financial Authority (FCA) has announced a number of measures that aim to help those that are struggling with their car finance or leasing payments.
If you’re struggling to keep up with payments, your first step should always be to contact your finance provider. The FCA has said that firms need to provide a three-month payment holiday for those that have been financially hit by coronavirus (COVID-19).
These measures have already come into play. They aim to make sure that providers can’t change your car finance or leasing plans “in a way that is unfair”. For example, firms have been told that they can’t alter personal contract purchase (PCP) or personal contract hire (PCH) if a car depreciates heavily due to the coronavirus situation.
Elsewhere, the FCA has said that firms with PCP customers wanting to buy their car, but without the funds to cover the balloon payment, should find an “appropriate solution”. It also added: “Firms should ensure that solutions do not lead to unfair outcomes”.
James Fairclough, CEO of AA Cars and AA Finance said that these measures mean drivers would be “greatly reassured to know the FCA has their back”.
He added: “In effect, these guidelines mean that anyone who’s worried about keeping up with their repayments because their income’s been impacted by the coronavirus situation will be entitled to a three-month payment holiday
“Crucially, the FCA’s measures ensure every customer will be treated the same, whoever their lender is, and whatever type of finance plan they are on.”
However, he urged struggling drivers to speak to their lender as soon as possible.
“The onus is on drivers to contact their lender before they run into difficulty. Call centres are understandably busy at present, but many providers are offering payment holiday request forms online.
“For its part, the FCA must ensure consumers get the message that in the current climate there is no shame whatsoever in experiencing financial stress.”
“If motorists anticipate struggling with repayments, the right course of action is always to contact their lender sooner rather than later.”