Coronavirus: Impact on your car finance

If you are one of the many car owners financing your car, you might be wondering what is going to happen with your payments. Particularly if your deal is coming to an end with so many car dealerships now closed.

Here we will advise the best steps to take in this very uncertain situation. 

Leasing deals

If the lease on your vehicle is shortly due to end, you should contact your lease provider as soon as possible. Given the current situation, many leasing providers have agreed to extend current contracts. Often these extensions last 2 or 3 months. However, if possible we recommend requesting a rolling based contract, which will allow you greater flexibility. 

PCP deals

PCP deals allow you to make an optional final ballon payment at the end of your contract. If you have reached this stage then only pay this if this is what you were planning to do before the disruption. You will have other options available to you so call your lender to discuss this. Similar to leasing, you should also be able to arrange an extension to your current contract. This will give you time to consider your next steps. Remember you will have the option to put any equity you have built up towards a towards a new car or deal (as you did pre Covid-19) once the dealerships have opened up again. 

I am struggling to make my finance payments, is there help available? 

With many peoples incomes affected by the pandemic, it is not surprising people are struggling to make what is often a considerable car finance payment. 

If you are in this situation and think you may struggle to make a payment, contact your finance as soon as possible. By making your provider aware of the situation, this lessens the risk of a payment being missed and your credit score being adversely affected. Moreover, in general finance companies have been understanding of the situation and might be able to come up with a solution. For example, a deferred payment or a longer term agreement with lower monthly payments. 

Returning my car due to Coronavirus 

If you are really struggling financially and not getting any use of your car, you might think you would be better off returning it. However your options will completely depend on the terms of your contract and how far you are through it. If you paid 50% of the amount at purchase you will be entitled to voluntary termination, assuming your car is in good enough condition. 

Before you consider this option, it is worth talking through your options with your finance company first, to see what assistance you might be able to offer you. 

For further advice please call us on 0345 017 9795 and one of our friendly advisors will be happy to help. 

Car finance - balancing act

Car Finance