Car finance customers are set to get until the end of October to apply for a payment freeze if they haven’t already had one.
Customers who have already taken up support and who are still experiencing financial difficulty could also be offered further payment holidays or reduced payments for a further three months.
The Financial Conduct Authority has today (July 3) announced proposals that will ease pressures on those who are struggling to pay for their cars.
The FCA has asked the finance industry for comments on the proposals to be submitted by Monday and they are likely to come into force very soon after that.
The FCA says that at the end of the first payment freeze period – which many customers already have taken advantage of – finance firms will be asked to talk to customers first to see if they are in a position to restart payments.
If they are not, they should then ‘agree a plan’ on how missed payments can be paid if the customer can afford to do so.
However, for those still in difficulty, the FCA said: ‘Firms should provide them with support by freezing or reducing payments to a level they can afford, on their motor finance for a further three months.’
Christopher Woolard, interim chief executive of 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 FCA has said that anyone who requests a payment freeze should not ‘have a negative impact on credit files’ because of the request.
Guidance to car finance firms will be issued ‘shortly after’ the comment period ends at 5pm on Monday (July 6).
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