► Car payment holidays explained
► VW and Ford considering them
► Not universally being considered by manufacturers
2020 is increasingly becoming a torrid time for households in the UK. At least mid-March broke the welcome news that British homeowners could be eligible for a mortgage payment holiday.
Naturally, people’s attention have moved onto their second-highest outgoing, their monthly car payments.
Car manufacturers have anticipated this, and have plans in place to help.
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What is a car payment holiday anyway?
A car payment holiday broadly works in the same way as a mortgage payment holiday.
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Your finance provider will temporarily give you a break. This will typically be between one and three months. At the end, it recalculates your monthly payments to make up for the payments you’ve not been paying.
This is by no means a way of getting your payments cancelled.
PCP and HP finance holidays
If you have a PCP or HP style finance agreement on a new car, there’s a good chance it’s with a manufacturer-backed scheme. The good news is that most manufacturers are willing to help out in some way.
German powerhouse Volkswasgen has revealed that UK customers facing financial difficulties could be eligible for a (up to) 60 day payment holiday, or the extension of a repayment plan that would reduce monthly outgoings.
Ford, makers of Britain’s bestselling car, the Fiesta, told sister site Parkers that its plans include payment holidays, among things like cancellation of late fees.
Hyundai and Kia are also looking into offering payment holidays.
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It’s not universal
One important thing to remember is that not every car manufacturer is offering this. By law, finance providers have to offer help in some sort.
The financial regulatory body of the UK (the FCA) has said that it expects firms to: ‘provide strong support to customers during this period.’
It’s also important to remember that car payment holidays aren’t immediate, and they’re not here to stay. Some manufacturers are predicting that it could take up to three months to implement any scheme.
Just another thought - smaller manufacturers, like Tesla, don’t offer their own finance. Tesla for instance, is telling customers in financial worries to contact individual finance providers.
For a list of what each manufacturer is saying specifically, visit our sister site.