Coronavirus Update: Support for car finance customers and latest impact on car industry

FCA announcement on car finance

Further to our last previous blog about the implications of Covid-19 on car finance, the FCA has now announced support measures for struggling motorists. 

In welcome news, the UK’s financial regulator has directed all motor finance providers to allow a temporary 3-month payment freeze for any customers struggling with their payments. Further still, firms should not take steps to end a contract, or repossess a vehicle, if the owner still needs to make use of their car. 

The FCA has also made clear to finance providers that any alterations being made to agreements are being carefully monitored. Essentially they have been warned not to make any “unfair” changes to the detriment of the customer. For example, reducing the optional final payment, which could consequently increase monthly payments. 

The final new measure protects motorists coming to the end of their finance agreements. If drivers wish to keep their car at the end of the contract but are now unable to afford it, providers are expected to reach an appropriate solution. One such solution could be a temporary extension of the contract.

Impact on car market – is now a good time to buy a new car? 

Car manufactures have been badly hit by Covid-19 and statistics show that in March new car registrations fell by 44% – the lowest level in 25 years. However, there has been news this week that car factories across the UK and Europe are beginning to gradually reopen. 

With demand for cars currently extremely low and dealerships still closed, many of these dealerships have stock they will be keen to sell. Therefore it could be a good time to negotiate a deal for a new car, either by phone or email. If you plan to finance your new car, then with interest rates at an historic low, there should be better rates available to you. Although almost all car deals can now be done electronically, but a word of caution these uncertain times, that delivery and safety restrictions will vary by manufacturer.  

It certainly is a good time to do some market research on the models available and look at some of the many car reviews available online. Many car reviewers and publications now use Youtube to demonstrate different models, this can be a great way to gain an in-depth understanding of your potential new motor.   

For further advice please call us on 0345 017 9795 and one of our friendly advisors will be happy to help. Or click here to get a quality, low-cost motor insurance quote now


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