Six month payment holiday announced for those struggling with car finance
Those with outstanding car finance will be able to request an extended payment holiday following HM Government's confirmation of further lockdown restrictions in England from Thursday 5th November.
This follows the FCA's governance in April that lenders should provide the option for borrowers to request a 3 month payment holiday if affected by the first COVID-19 lockdown earlier this year.
This new, additional six month payment holiday is open to customers facing new financial concerns as a result of coronavirus as well as those who may have made use of the earlier three month relief. Not only open to those with motor finance, it will extends to personal loans, credit cards and more. However, they reiterate that it is important that borrowers who can afford to continue their payments do so.
They said, "To support those financially affected by coronavirus, we will propose that consumer credit customers who have not yet had a payment deferral under our July guidance can request one. This could last for up to 6 months unless it is obviously not in the customer’s interests. Under our proposals borrowers who are currently benefitting from a first payment deferral under our July guidance would be able to apply for a second deferral."
The proposal outline by the FCA on 2nd November will allow:
- those who have not yet had a payment deferral will be eligible for 2 payment deferrals of up to 6 months in total
- those who currently have an initial payment deferral, will be eligible for another payment deferral of up to 3 months
- those who have resumed repayments after an initial payment deferral will be eligible for another payment deferral of up to 3 months
Under these guidelines, borrowers will have until 31 January 2021 to request a deferral.
The FCA are currently in talks with funders throughout the UK on how best to support their customers and will confirm next steps accordingly. They urge customers to refrain from making contact until these talks are completed.
They continue, "We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly.
In the meantime, consumer credit customers should not contact their lender just yet. Lenders will provide information soon on what this means for their customers and how to apply for this support if our proposals are confirmed."
See the FCA's full statement on updated COVID-19 support for car finance customers.
On whether these payment gaps would affect customer's credit files, the FCA concluded: "A payment deferral under these proposals would not be reported as missed payments on a borrower’s credit file. This does not mean that consumers’ ability to access credit will be unaffected in future, as lenders may take into account a range of information when making lending decisions...
Tailored support may be reported on a borrower’s credit file, and lenders should inform borrowers where this will be the case."
Funder contact information.
We will provide updates as we get them but should you need to contact your funder urgently, please do so on the numbers provided below:
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
Support settling current finance agreement
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