Coronavirus: support for car finance customers announced

Financial Conduct Authority announces measures to help car finance customers struggling to meet payments during coronavirus crisis

Raising finance for your van

The Financial Conduct Authority (FCA) has announced a package of measures to support car finance customers who are struggling to meet their payments during the coronavirus crisis.

The UK’s financial regulator has told motor finance providers that they must provide a three-month payment freeze to any customers facing temporary financial difficulties as a result of the crisis.

Plus, if these drivers still need to make use of their car, the FCA says the firm should not take any steps with a view to ending the finance agreement or repossessing the vehicle.

Motor finance providers have also been warned not to make “unfair” alterations to PCP or PCH agreements. One example the organisation gives is recalculating a final balloon payment based on the temporary depreciation of a car’s value caused by the coronavirus crisis.

Finally, in cases where a customer wishes to keep their car at the end of a PCP agreement but is temporarily unable to afford the final balloon payment due to the crisis, firms are expected to “work with the customer to find an appropriate solution”, ensuring that there are no “unfair outcomes”. The FCA adds that refinancing the balloon payment “might not be appropriate”.

Christopher Woolard, interim chief executive of the FCA, said: “We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products. Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments.”

Find out how coronavirus is affecting the car industry here...

Recommended

Covid-19: what it means for motorists and the car industry
News

Covid-19: what it means for motorists and the car industry

Everything you need to know about how Covid-19 affects cars, motorists and the car industry in the UK
5 Jan 2021
Current car usage at similar levels to May 2020 despite lockdown
Traffic
News

Current car usage at similar levels to May 2020 despite lockdown

New data suggests 10 per cent more cars are being used in the UK now than during the first lockdown in March 2020
13 Jan 2021
Volvo XC40 Recharge T5 R-Design: long-term test review
Volvo XC40 Recharge T5 long termer - final report header
Volvo XC40

Volvo XC40 Recharge T5 R-Design: long-term test review

Final report: Our plug-in Volvo XC40 Recharge T5 has proved a useful step on the way to full electrification
13 Jan 2021
MG and Tesla were the only car makers to increase sales last year
Tesla Model 3 - Front Tracking
News

MG and Tesla were the only car makers to increase sales last year

New-car registrations hit a 30-year low in 2020, but two manufacturers managed to buck the trend
6 Jan 2021

Most Popular

New Dacia Bigster concept previews future SUV
Dacia Bigster - front
Dacia

New Dacia Bigster concept previews future SUV

New concept gives us a glimpse at an all-new flagship Dacia Bigster model that has value at its core
14 Jan 2021
BMW X2 M Mesh Edition on sale now priced from £34,510
BMW X2 M Mesh Edition - front
BMW X2

BMW X2 M Mesh Edition on sale now priced from £34,510

The BMW X2 M Mesh Edition features unique decals and upholstery, as well as – you guessed it – a mesh radiator grille
15 Jan 2021
New Nissan Qashqai to gain e-Power hybrid setup
Nissan Qashqai - exclusive image front
Nissan Qashqai

New Nissan Qashqai to gain e-Power hybrid setup

Nissan has revealed specs of the next-gen Qashqai’s e-Power electrified powertrains ahead of the car’s full reveal early this year
15 Jan 2021