Regulator offers further coronavirus car finance support

Christopher Woolard, Interim Chief Executive at the FCA, said: “It is vital that people facing temporary payment difficulties because of the impact of coronavirus get the assistance they need.

“For those who have already taken a payment freeze and can afford to start making payments, even partially, it is in their best interest to do so, but for those that need help it will be there.”

The industry has welcomed the latest proposals from the FCA, in particular the more nuanced approach that replaces the original blanket approach presented in April. Adrian Dally, head of motor finance at the Finance and Leasing Association (FLA), which represents the lenders, said: “The breadth of today’s guidance from the FCA recognises the variety of different situations that customers will be in at this point.

“With more parts of the economy reopening, many customers will be returning to work and will be able to resume full payments. For those returning to part time work, partial payments are an option.

“Customers who still need ongoing help will, of course, be supported. Motor finance lenders have been providing unprecedented levels of forbearance to customers since the start of the crisis, but it is now time for the Government to support the industry so that it is able to continue to offer finance to consumers and businesses at affordable rates during the recovery.”

The FLA has reported to The Car Expert that, for the 12 weeks up until the end of May, about 613,000 car finance customers had made a request for Covid-19-related support (data for June should be available soon). Of these requests, about 90% had been granted. Specific details about how many of these were for the full three months of payment holiday are not provided, but the very high percentage of approvals suggests that the lenders have been supportive to date.