Automotive Tips

What Does The End Of Lockdown Mean For The Car Finance Industry?

On 12th April 2021, all non-essential retailers were allowed to reopen after a 3-month break and for some parts of the UK in tier 4, it has been an even longer wait! The reponing of dealerships and the start of life beginning to go back to normal is a great step forward for the car finance industry. 

The car finance industry took one of the biggest blows in recent years. New figures released by the Finance & Leasing Association (FLA) show that the consumer car finance market reported a fall in new business volumes of 27% in February 2021, compared with the same month in 2020.  

Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said:

“The UK lockdown restrictions over the winter months contributed to a fall in consumer car finance new business volumes of just over a quarter.

“As car showrooms re-open and consumer confidence recovers, we expect a strong rebound in demand. The value of annual new business in the consumer car finance market is expected to reach its pre-pandemic level this year.”

Now that dealerships are allowed to reopen and hopefully consumer confidence will be on the rise as life starts to go back to some sort of normality. Will the car finance industry recover quickly?

What are the new rules from 12th April 2021?

The car finance and car dealership sector has been given a series of sector-specific guidance to ensure that all customers and staff are safe and covid compliant. The new guidelines highlight rules across the full process from booking appointments to test drives and showrooms experiences, and aftersales practices. 

Dealerships have been able to operate during the recent lockdown but couldn’t welcome customers into their dealerships.

They could offer home delivery or click and collect on their premises. For many people, being able to have a good look at a car or take various cars out for a test drives are part and parcel of the car buying journey. It’s a really positive step forward for the motoring industry and car dealers are looking forward to welcoming customers back. 

Can you still buy a car online? 

Buying a car online wasn’t actually a new thing introduced for the pandemic. You have been able to buy a car online, get it delivered or collect it way before March 2020 when the UK went into its first national lockdown. If you aren’t ready to visit a dealership just yet, then you can still continue to buy a car remotely! 

Can I get a car on finance?

The reopening of dealerships is great news for dealer and brokers alike. You can view the car you like online at home and then sort your finance at the dealership. Alternatively, you could use a car finance broker, such as Refused Car Finance, to help sort your finance for you. You can do the whole process from the comfort of your own home and then collect the car you want.

Car finance brokers are essentially the middleman between you and your chosen lender. They work with a wide range of trusted and reputable lenders in the UK and match you up with the best one for your personal circumstances. Sorting your finance first ensures that you can get the best deal and then get the car you want within an affordable budget. Take your finance deal to any reputable FCA approved dealership across the UK and pick up your car or get it delivered to your home! 

What if I can’t pay my existing car on finance? 

In the first lockdown and throughout, lenders were offering a payment holiday. A payment holiday is when you stop making repayment for a period of time, but it does not write the debt or loan off. You will have to continue making repayments at the end of your agreed payment holiday.

Unfortunately, if you are struggling to meet your repayment deadline, car finance payment holidays ended on 31st March 2021. However, you can still apply to extend an existing payment holiday until 31st July 2021 as long as it doesn’t go over the six-month maximum payment holiday limit and there are no breaks in the support/payment holiday.

If you are still struggling to keep up with your repayments, the worst thing you can do is cancel your direct debit. Your car finance lender is there to help you. If you have taken out finance via a car finance broker, you will need to contact the lender who provided your finance. You should try to contact them before your next payment is due and they can advise what the next steps are.