With the unprecedented times we find ourselves in, people are worrying over car credit problems and payments. A lot of people are struggling to keep up with a loan and car payments. It is a real worry for some to stay afloat with the money they owe.
If you find yourself struggling and are having car credit problems, the financial regulator has released new guidelines stating that car finance companies must now offer a three-month freeze of payments if someone is having car credit problems. They have been told they must not repossess vehicles if their customers do not meet their payments and are facing financial difficulties due to the coronavirus.
The UK has a £75 billion car loan market, and there are worries that some customers will simply not be able to cover their payments, it is deemed to be unfair if a loan company takes the car off them due to the pandemic. There are currently over 6.5 million vehicles on finance in the UK alone.
The most used car finance method is PCP (personal contract plan) a customer will buy a car using a deposit then paying a monthly rental for two or three years (however long the agreement has been made for between consumer and finance company.
By allowing people with car credit problems to freeze three months of their payments it could just take the pressure off for the near future. Hopefully when all of this is over consumers will then be able to pay back what they owe over several smaller extra payments or one big one if they can do so.
This pandemic is causing problems all over the world and not just car credit problems, in many other areas too.