The millions of drivers with car finance deals will be greatly reassured to know the FCA has their back, said James Fairclough, CEO of AA Cars retail arm.
“In effect these guidelines mean that anyone who is worried about keeping up with their repayments because their income has been impacted by the Covid crisis will be entitled to a three-month payment holiday.
“Crucially, the FCA’s measures ensure every customer will be treated the same, whoever their lender is, and whatever type of finance plan they are on.
“The recommendation that consumers be allowed to keep their car where possible will also be particularly valuable for key workers who still rely on their vehicle to get to work.
“However it’s important to note that lenders will not make special arrangements automatically. The onus is on drivers to contact their lender before they run into difficulty. Call centres are understandably busy at present, but many providers are offering payment holiday request forms online.
“Past experience shows that when faced with financial difficulties, some consumers simply stop making repayments on their finance deals. This is best avoided, as it can harm your credit rating. If you are struggling, contact your lender to ask for a payment holiday – don’t just miss a scheduled payment.
“For its part, the FCA must ensure consumers get the message that in the current climate there is no shame whatsoever in experiencing financial stress; and that if they anticipate struggling with repayments, the right course of action is always to contact their lender sooner rather than later.”