The Financial Conduct Authority (FCA) has now confirmed temporary measures to support motorists who are facing difficulties making their car finance payments during the coronavirus crisis.
The measures will see a three month payment holiday for motor finance agreements. The FCA also said that if customers are experiencing temporary payment difficulties, then lenders and providers should not take steps to end the agreement or repossess the vehicle.
The FCA also stated that firms should not alter personal contract purchase (PCP) or personal contract hire (PCH) agreements in any way, deeming it unfair. Also, if a customer would like to keep their vehicle at the end of a PCP agreement but doesn’t have the funds to cover the balloon payment, they should work together to find a fair and appropriate solution.
Christopher Woolard, interim chief executive at 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.”
The plans, which were initially disclosed earlier this week, have now been confirmed and will come into force on Monday (April 27).