Car finance owners struggling to make payments during the coronavirus crisis should be given a three-month payment freeze, the finance regulator has proposed.
The FCA says firms should offer the payment freeze to both owners with car finance such as PCP, and those who are leasing their vehicles.
Firms should not take steps to end the agreement or repossess the vehicle.
‘We are very aware of the continued struggle people are facing as a result of the pandemic,” said interim FCA chief executive Christopher Woolard.
“These measures build on the interventions we announced last week, and will provide much needed relief to consumers during these difficult times.
Calls to car finance lenders from motorists seeking help have spiked 20-30 times the typical level during the coronavirus crisis, reports the FT.
The proposals from the FCA also state that contracts should not be changed in a way that’s unfair to customers.
This could include, for example, using a fall in used car values to recalculate the PCP balloon payment at the end of the term.
The FCA also says that if an owner wants to keep the vehicle at the end of the PCP term, but does not have enough money to cover the balloon payment due to coronavirus-related financial difficulties, finance firms should work with the customer to find a solution.
The proposed package of measures is now open for discussion, with submissions due by 5pm on Monday 20 April.