U.S Auto Makers Offering Payment Aid during Coronavirus Pandemic

By Cee Lippens March 17, 2020 690

Many of the country's largest auto manufacturers have announced this week that buyers of new vehicles that have been affected by the CoVId-19 shutdown will have options. Numerous ideas are being floated from delaying the first payment, rescheduling payments, to zero-interest loans. U.S automakers are looking to boost new auto sales as China reels from a 79% drop in domestic auto sales caused by their CoVid-19 shut-down.

  • On Friday Hyundai Motor Co announced it is deferring payments for 90 days select new models and will provide up to six months' relief on payments for customers that are laid-off due to CoVid-19.
  • On Monday Ford Motor Company followed suit announcing it is offering the option to customers to delay their first payment by 80 days. Details are on Ford's Credit Support website.
  • General Motors made a statement that they are working with customers on a case by case basis and will also be providing payment relief to customers affected by the CoVid-19 shut-down.
  • General Motors is going to offer zero-interest loans for up to 84 months, in a deal available to customers in top credit tiers.
  • Nissan and Toyota also stated they will be providing relief options to customers affected by the virus, including deferred lease payments and extensions on loan payments.

There is another group of car owners that will need payment relief in some capacity in the coming months. 26 percent of all auto loans issued in 2016 were high-interest subprime loans taken out by low income and poor credit score buyers. Seven million Americans are at least 90 days late on their auto loan payments, according to a report by the Federal Reserve Bank of New York. These 7 million loans account for 4.5 percent of all auto loans in the U.S. Borrowers with the lowest credit scores have seen the fastest acceleration on auto-loan defaults.

For America's low-income workers having a car is often a necessity for keeping a job and the shut-down of restaurants and other service industry businesses could exacerbate an already growing issue with sub-prime auto loans.

 

 

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Last modified on Tuesday, 17 March 2020 15:05