FCA expects 3-month finance freeze

  17 April 2020

The FCA has revealed it expects motor finance firms to provide a three-month payment freeze to customers who are having temporary difficulties meeting finance or leasing payments due to coronavirus.

If customers are experiencing temporary financial difficulties due to coronavirus, firms should not take steps to end the agreement or repossess the vehicle.FCA

In a statement issued this morning, 17 April, the FCA also proposed: “Firms should not change customer contracts in a way that is unfair. For example, firms should not try to use temporary depreciation of car prices caused by the coronavirus situation to recalculate PCP balloon payments at the end of the term. We will expect firms to act fairly where terms are adjusted.

“Where a customer wishes to keep their vehicle at the end of their PCP agreement, but does not have the cash to cover the balloon payment due to coronavirus-related financial difficulties, firms should work with the customer to find an appropriate solution.”

Christopher Woolard, interim chief executive at the FCA, said: “We are very aware of the continued struggle people are facing as a result of the pandemic. These measures build on the interventions we announced last week, and will provide much needed relief to consumers during these difficult times.

“We have tailored our measures to specific products. For most of these proposals, firms and consumers should consider the amount of interest which may build up, and balance this against the need for immediate temporary support. If a payment freeze isn’t in the customer’s interests, firms should offer an alternative solution, potentially including the waiving of interest and charges or rescheduling the term of the loan.”

Full details of the FCA proposals can be found here.

Barbuck

imageTags: Covid-19, FCA, finance

Start your free 14 day trial

Get free access to our Bulletin, Agenda & Profit for 14 days.

After 14 days we will auto bill your credit or debit card unless the order is cancelled.


As an auto retail executive you need insightful and unique industry intelligence to boost your business potential. Here’s a taste of what Auto Retail Network has to offer:

  • Get informed and boost your business potential
  • More than 1,200 fellow executives have joined us
    since launch
  • Independent, carefully crafted, unique content relevant to you and your business
  • Develop a greater awareness of market trends and opportunities
  • Access to a wide range of materials whenever, wherever and however you want it
  • Significant discounts on ARN events, reports and
    other publications