The financial regulator of the UK has announced that leasing companies must offer a three-month payment holiday for those affected by the Coronavirus (COVID-19) pandemic.
During the three-month freeze, The Financial Conduct Authority (FCA) has said that cars should not be repossessed, plus, car finance companies should not charge contracts ‘in a way that is unfair.’
The blanket advice remains for customers to get in contact with their finance companies. But the big news is that these companies must act on it.
What do the leasing companies say?
John Tracy, CEO of leading leasing company, Zen Auto, said: ‘It’s extremely good news for customers. This latest ruling from the FCA makes it extremely clear – it’s not acceptable not to help customers.’
Major leasing comparison website, leasing.com, says that leasing companies should be able to help. A spokesperson for the company said: ‘Although the Coronavirus is a unique situation, finance companies are used to helping consumers experiencing financial difficulties.’
What is a car payment holiday?
A car payment holiday works in the same way as a mortgage payment holiday.
It involves customers temporarily stopping car payments. Then, at the end of the holiday, the finance company recalculates your monthly payments.
What this means for you
The FCA has finally put some weight behind a payment holiday scheme. This means all finance companies are obliged to listen to consumers if they’re being affected by the Coronavirus.
If you don’t have a leasing deal, but are on a Personal Contract Purchase (PCP) or HP (Hire Purchase) deal, payment holidays are on the cards for these.
Further reading
>> Coronavirus (COVID-19) advice for drivers
>> Payment holiday advice: What are car manufacturers offering?
>> Vauxhall adds 0% APR to new Corsa
>> Looking for a new car? Here are the best new car deals
Nothing to report beyond the usual process, I.e anyone in difficulty should contact the company as soon as possible to discuss options.
