Coronavirus support for motor finance agreements
The FCA has now confirmed welcome temporary support for those with an existing lease agreement who are facing financial difficulty as a result of the coronavirus outbreak.
Available to personal customers, the FCA has asked the funders of Personal Contract Hire, Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements to provide a three-month payment holiday to customers affected by COVID-19. This follows similar legislation that has facilitated the same relief for mortgage repayments.
The support outlined does not apply to agreements for business purposes.
Who are the FCA?
The Financial Conduct Authority (FCA) regulate firms offering financial services of all kinds; including pensions, loans and investments like vehicle leasing. It is their aim to ensure financial markets are fair and honest for both customers and businesses, and ultimately ensures a level playing field for everyone involved.
The FCA were established in April 2013 and a responsible for regulating the conduct of more than 59,000 UK business. You can find out more about FCA authorisation and what it means for Carparison here.
What support will lease holders get during COVID-19?
From Monday 27th April, personal customers facing financial uncertainty as a result of the ongoing coronavirus pandemic will be able to contact the funder of their lease agreement to request a payment holiday. A request can be made at any point during the three month period after this commencing date.
This guidance will be reviewed again after three months.
The FCA outlines that,
“This guidance sets out our expectation that firms provide, for a temporary period only, exceptional and immediate support to customers facing payment difficulties due to circumstances arising out of coronavirus. It is intended to provide help to those who might be having temporary difficulty in making their finance or leasing payments due to a loss of or reduction in their income (or income of other members of their household) or to those who expect to experience such difficulties.”
The consequences of a payment holiday on your vehicle finance could result in higher payments once the relief period ends. This could be in addition to an extension of your lease term.
The FCA also dictates that the funder must communicate term changes clearly to all applicants to ensure suitability.
“A firm should give customers adequate information to enable them to understand the implications of a payment deferral. For example, for a regulated credit agreement, this would include the consequences of interest that is accrued during this period and its effect on the balance due under the agreement and on future payments.
Where a term is being extended, firms should bring to the attention of the customer the need to consider wider implications of the extension – such as potential knock-on effects on insurance, warranties, breakdown cover or MOT.”
Read the FCA’s full guidance on temporary payment holidays for lease holders
The full FCA guidance on support for lease holders during coronavirus is available to read here.
What to do if you require lease payment relief
It is important to ensure that individuals take responsibility for their financial circumstances and apply for lease vehicle repayment deferrals if they require it. Relief will not automatically be provided by funders without customer contact.
All support centres are naturally experiencing higher call volumes than normal at present. Therefore, it is important to act as soon as possible to ensure you are able to meet all expected payments. Missing payments on your vehicle financing agreement at any time could negatively impact your credit score and make borrowing harder or more expensive in future.
If you already have a lease vehicle and wish to discuss your options, please contact your finance provider directly on the contact details provided below.
Funder contact information.
ALD Automotive Ltd 08000 32 32 77 (opt 8)
Lex Autolease 0344 879 6633
Arval UK Limited 0345 266 5228 (opt 5)
Hitachi Capital 0343 351 9078
Santander Consumer Finance 0330 134 8753
Leaseplan UK ltd 0344 493 5812 (opt 6)
Audi Finance 0370 010 2007
BMW Finance 0370 5050 150
Mercedes-Benz Finance 0370 847 0700
Nissan Finance 0870 195 5666
Seat Finance 0870 333 4446
Land Rover Finance 0344 879 6719
Volvo Car Financial Services 0844 879 6565