The Financial Conduct Authority (FCA) has announced its plans to give those struggling to pay their car finance a three-month payment holiday.
Coming into force on Monday (April 27), the measures aim to help those hit by the ongoing coronavirus pandemic.
The FCA says that finance companies should provide the temporary freeze on finance and lease agreements for three months and not to take steps against those struggle to pay for their cars.
The measures say companies should not “take steps to end the agreement or repossess the vehicle”, and not alter agreements unfairly – adjusting payments based on temporary depreciation in a car’s value, for example.
The FCA’s statement also said that customers looking to purchase their car at the end of their finance agreement shouldn’t be penalised if they don’t have the funds to cover the optional final payment. It said companies should work to find “an appropriate solution”.
Christopher Woolard, interim chief executive at the FCA, said: “We have worked at pace to introduce temporary financial relief tailored for a range of specific credit products. Many firms are already working with their customers, but these measures ensure all consumers affected by the coronavirus emergency can apply for a temporary freeze on their payments.”
Anyone that is struggling to keep up with their payments is urged to get in touch with their finance company.