Car finance payment holiday could be introduced soon

People struggling to pay their car finance after their income dropped because of the coronavirus could be given a lifeline next week.

Reports from the BBC suggest car finance payments could be the next target for the Financial Conduct Authority (FCA) as they seek to ease the pressure on consumers’ finances.

Speaking to Car Dealer magazine, an FCA spokesperson said there would be an announcement on car finance ‘one day next week’.

General measures announced by the FCA today include a payment freeze of up to three months on loans and credit cards, an overdraft of £500 with no interest for affected consumers, ensure all overdraft customers are not worse off compared with before the new charges were introduced, and making sure the credit history of anyone taking advantages of this help is not affected.

Interim chief executive of the FCA Christopher Woolard said: “We know many people are suffering financial pressures brought on as a result of the coronavirus pandemic. The measures we’ve announced are designed to provide people affected with short-term financial support through what could be a very difficult time.

“The changes will provide support for consumers with credit cards, loans and overdrafts, facing temporary financial difficulties because of the pandemic.

“We know there is still more work to be done, and we will be announcing further measures to support consumers in other parts of the credit market in the future, including in the motor finance sector next week.”