Several carmakers in the United States are allowing new car buyers to delay or reschedule their car finance payments amid closures and financial uncertainty caused by the coronavirus (COVID-19) outbreak.
In an effort to maintain new car sales during a time of financial uncertainty, manufacturers like Ford, Hyundai, General Motors, Toyota and Nissan are offering their US customers alternate options if they can't continue to make payments.
UPDATE (20/3/20): Ford US and Nissan Australia have both now revealed the specifics of their payment relief options. Details in story.
Ford announced this week that its credit unit would allow customers to delay their first payment for 90 days, as well as revealing incentives for Ford dealers who provide additional support to customers during the crisis.
It will also offer six-month payment relief for Ford Finance customers purchasing 2019 and 2020 model-year cars, covering the first three months of payments and offering buyers the ability to defer the next three months.
"Like we did in the Great Recession, Ford is managing through the coronavirus crisis in a way that safeguards our business, our workforce, our customers and our dealers during this vital period,” Ford CEO Jim Hackett said.
Ford Australia told CarAdvice its partner 'myFord Finance' was also "proactively reaching out to retail customers about ways they can support them".
"We’re also working closely with our dealer partners through this challenging time,” a Ford spokesperson said.
If you are impacted by #COVID19 and you’re leasing or financing through Ford Credit, we’re here to help.Call 1-800-723-4016 or visit https://t.co/L5UtkRZgZz for more information. pic.twitter.com/n9vhyEmOVP— Ford Motor Company (@Ford) March 16, 2020
Last week, Hyundai in the US said it was reviving its Hyundai Assurance Job Loss Protection Program to give owners "peace of mind in uncertain times," deferring payments on select new cars by 90 days and providing up to six months of payment relief for customers disadvantaged by job losses.
A representative for Hyundai Australia said there were no plans at this stage to implement a similar program locally.
Nissan told the NY Post it was planning to launch a similar payment relief program in the US, while Toyota US and General Motors will also provide alternative options to customers affected by the virus, including payment extensions and deferrals.
As for Australia, a Toyota spokesperson told CarAdvice: "Toyota Finance Australia cares about the safety and well-being of its customers. We are continuing to monitor the situation closely and stand ready to help affected customers."
A Nissan Australian spokesperson told CarAdvice the brand had "established procedures for customers who may experience financial hardship, such as the evolving financial impacts of the COVID-19 scenario".
"Customers are encouraged to contact our customer service centre on 1800 035 035 to discuss their specific scenario and to agree on a modified solution for their circumstance," the spokesperson said.
A June 2019 report from Moody's financial services found auto loan delinquency rates in Australia were on the rise and were predicted to continue rising.
In 2018, a finder.com.au analysis of Australian Bureau of Statistics data found one in five cars in Australia were purchased using a loan.
New payment deferral measures in the US come as GM, Ford and Fiat Chrysler face pressure from workers' unions to shut their American factories in order to contain the virus, which at this stage has infected close to 6000 people across the country.
This week, the Volkswagen Group acknowledged that 2020 could bring substantial financial challenges, after announcing that the company saw an increase in operating profit for 2019.
"The corona pandemic presents us with unknown operational and financial challenges," Dr Herbert Diess, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, said.
"At the same time, there are concerns about sustained economic impacts. We will succeed in overcoming the corona crisis by pooling our strengths and with close cooperation and high morale in our Group."
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